The central bank of the United Arab Emirates said it would provide a special fund to back local and international banks operating in the UAE, media reports said.
The UAE central bank said it stands behind those lenders, the reports say.
The central bank, based in the emirate of Abu Dhabi, said it had told the banks that it had set up a special liquidity facility at a rate of 0.5 percentage point above the Emirates interbank offered rate, media reports said.
Dubai World, the conglomerate controlled by the government of the neighboring emirate Dubai, has asked for a six-month standstill on repaying its debt, estimated at almost $60 billion.
Meantime, U.K. media reports on Sunday quoted a senior Abu Dhabi official, who wasn't identified, as saying that the emirate will assess carefully whether and how to assist Dubai.
The official was quoted as saying that it would approach Dubai's commitments case by case and would not necessarily underwrite all its debts.
The Times of London reported that investment bankers advising Dubai expect the emirate to sell high-profile assets, like the QE2 cruise liner and the Turnberry golf course.
The Telegraph quoted sources close to Dubai's government as saying that the western financial-services bailouts might provide a model for the emirate. The paper said advisers have suggested that the problem debts - particularly those of Dubai World's Nakheel real-estate unit - be ring-fenced, or sequestered from the good assets
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