Will this blip develop into a crisis? As the FT’s leader points out, Dubai’s fellow emirate Abu Dhabi can cover its neighbour’s stated debt. That it hasn’t implies that either the Sheikh of Dubai has had too much sun or the debt is larger than alleged. It is too early to turn panic into pandemonium by heralding the coming of the double of dip.
How far are British banks exposed? Gordon Brown has been terribly keen to define British identity, and under his leadership we now have an answer: our pre-eminent national trait is a flair for investing in duds. J.P. Morgan report that HSBC’s liabilities are £17bn and RBS’s stand at £200m, and who knows how far Barclays (who described Dubai debt as a ‘good buy’ last week) are exposed. If the UAE decides against rescuing its brash junior member, will further demands be made on the UK taxpayer? Between you and me, I suspect we will get a share in the Beckhams' grotesque bungalow.