macroeconomic

Running Head : Role of the Central and Commercial Banks in the UAE

Name

University

Course

Tutor

Date

Table of Contents Page

Introduction .3

Role of the Central Bank .3 , 4

Role of Commercial Banks .5

Conclusion .6

References .7

Introduction

A Central Bank is essentially a bank of banks and naturally influences the operations of other banks . Downes Vaez Zadeh (1991 argue that as a result of their intrinsic qualities and legislative prescriptions , they serve as a means of payment not only

amongst individuals and firms but also among other banks and financial intermediaries . In for a central bank to influence parameters in the financial markets , it is necessary for it to have a large balance sheet with respect to the economy 's dimension

In August of 1980 , Federal Law No . 10 came into effect upon which the monetary system and organization of banking in the United Arab Emirates (UAE ) is founded . The banking system of the UAE thus includes but is not limited to the central bank , national and foreign commercial banks development institutions , finance companies , exchange bureaus etc Article 5 of that law further stipulated the roles to be played by the central bank and which are geared at economic development . A few of these are discussed in detail hereunder

Role of the Central Bank

First and foremost , the central bank is the only institution in the UAE that is permitted by the law to issue bank notes and coins of various denominations as determined . It is...