The United Arab Emirates Central Bank has set up a 50 billion dirham ($13.6-billion) facility to help banks in the Emirate deal with the turmoil arising from the global financial crisis.

The move comes within a week of the US Federal Reserve bailing out insurance giant AIG and investment banker Lehman Brothers.

In a statement the UAE Central Bank's board of directors said that the bank had discussed the position of inter-bank deposits, "which has been affected by the liquidity constraints in international money markets and may pump in more money to ease it".

"To remedy this situation, the Central Bank has decided to set up a facility amounting to 50 billion dirhams (USD 13.6 billion) for banks operating in the Unite Arab Emirates, to be used by these banks if so needed," it said.

The bank said it "expects that these funds would meet banks needs for supporting continued financing of economic growth."

The board also "reviewed additional available resources for providing further support to banks operating in the UAE if required."

Earlier, on Thursday, 18 September after meeting in Dubai of all top management of banks operating in the region, it had said that UAE banks had "virtually  no exposure to Lehman Brothers, that there was no systemic risk in the UAE as a fallout in international mopney markets" and stressed the soundness of the UAE banking system.

It also discussed various measutres for boosting the liquidity of banks in the region. Three days earlier the board had issued a press statement that it was assured that 90 per cent of the "speculative hot money" had alrady flowed out of the sysytem.