Dubai is fighting to preserve the reputation of its embryonic international financial centre following the shock decision to dismiss the two men in charge of setting up its regulatory system.
Representatives of the developer, the Dubai International Financial Centre (DIFC), and of the two sacked executives, Ian Hay Davison and Phillip Thorpe ? respectively the former chairman and chief executives of the regulator, the Dubai Financial Services Authority (DFSA) ? are now embroiled in an increasingly acerbic dispute over the reasons for the dismissals.
The DIFC moved quickly to minimize disruption by appointing Habib Al-Mulla, a member of the DFSA board, as its new chairman, and David King, the managing director of supervision and a former chief executive of the London Metal Exchange, as Thorpe?s successor.
Reaction in Dubai is divided about the impact of the decisions, which could cast a shadow over the future of the multi-billion dollar financial centre.
One senior western banker describes it as a ?massive own goal?. But another says that the decision would accelerate the success of the DIFC.
But there is no doubt that Bahrain and Saudi Arabia, which also have ambitions to become the region?s leading international financial centre, will see it as an opportunity to court the banks that were considering taking out licences in the region.