In theory, setting aside part of a bank's earnings in case a borrower defaults on a loan is no bad thing. It does not mean that the loan will be not repaid, but that the bank is being prudent.
In many of the financial centres of the world at the end of 2008, lenders as diverse as Citibank, Barclays and Societe Generale raced to raise their levels of provisioning.
In the UAE, most banks did something similar, although executives were quick to claim that the impact was not what the levels of provisioning might suggest.
They were right. Judging by the fact that provisions for bad loans have since soared by almost 30 per cent over the past year, it appears the banking sector is in much worse shape than anybody had thought.
But the Central Bank has moved the goalposts. There is no indication that the banking environment is worsening; it is only the methodology that has changed.
It is commendable that the Central Bank is moving to adopt international standards, but some of the new measures appear to be harsher than those set out in Basel II, the globally accepted code.
Understandably, some bankers are pushing back against the new guidelines, particularly the one that gives no allowance for tangible security.
For example, if a bank loans money to build a factory and the final payment is not forthcoming, the value of the factory is not taken into account. Under Basel II, it would be.
The country has historically backed its banks, many of which are state-owned or have close government ties.
As a result, no bank is going to fail. But for the time being at least, the outlook is getting worse - or being made to look worse - for the country's bankers, not better.