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Title: Analysis of financial crisis in UAE financial markets
Authors: Zaki, E. 
Bah, R. 
Rao, A. 
Issue Date: 2012
Journal: International Research Journal of Finance and Economics 
Abstract: This paper provides empirical evidence on the causes and timing of the recent 2007- 2008 UAE financial crisis. A persistent weakness in the economic fundamentals throughout much of the pre-crisis period created necessary conditions for the financial crisis. However, the timing of the financial crisis was determined by a unique combination of an increase in leverage risk faced by the banking system and a decrease in foreign exchange reserves (FXRES) that forced the government to bail out the troubles financial institutions. A Vector Auto-Regressive (VAR) analysis identified UAE Foreign Liabilities, Central Bank's Quasimoney, Government intervention activity through increasing FEX Reserves, Improved corporate earnings, Leverage risk of the banking system (that serve as a proxy for the market value of banking system) and the ratio of quasi money (M 2) to foreign exchange reserves (FXRES) that measures the government's access to reserve for initiating bailout policies to explain the cause and timing of UAE economic crisis. © EuroJournals Publishing, Inc. 2012.
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