The financial disturbance over Dubai "can be contained" as the affected companies and their creditors are likely to reach a standstill agreement, Zoellick said in statements carried by Kyodo News and other Japanese media.

"Officials have to be prepared for different waves of the [global] crisis," Zoellick said. In 2010, "we have to anticipate potential dangers because we are not through this crisis", the head of the international lending institution added.


Low-interest rate policies adopted by monetary authorities after the start of the global financial crisis drove people to put their money in real estate, stock markets or other assets, according to Zoellick.

Standard Chartered, commenting on its exposure to the restructuring companies in Dubai, said that any resultant loan impairments would not be material.

In a scheduled trading update, Standard Chartered said that the situation in the UAE remained in its early stages and was "fluid". It added: "Given the profile of our exposures in Dubai, we do not believe any impairment would be material."

Investment Bank EFG-Hermes has revised the UAE's economic growth, forecasting real GDP growth of 2.9 per cent in 2010, with real non-oil growth forecast at 2.7 per cent.


                                                                                     Cecilia Helland