Dubai's debts and the perception of federal bailout support

FT (October 12th):

Dubai’s debt has soared to about 100 per cent of gross domestic product and continues to grow, leaving it vulnerable to an economic slowdown, according to Moody’s.

In a report obtained by the Financial Times, the ratings agency says Dubai would lack the financial muscle to cover its debt in the event of a systemic shock, such as a real estate collapse or an adverse geopolitical event, making it reliant on Abu Dhabi to bail it out.

“Moody’s will therefore be increasingly factoring the potential for federal support ... given that Dubai is likely to require federal support in the event of a larger-scale systemic bail-out,” the report says.
...
Dubai’s leadership also says the emirate has thrived through previous world crises and has no plans to slow down the city’s breakneck speed of development.

Moody’s does not rate Dubai’s government, but six government-related bodies have received A1 to A3 ratings on the perception of federal support.
...
The United Arab Emirates authorities, Moody’s notes, have a record of supporting failing banks in crises over the past three decades.

Officials in Abu Dhabi, whose assets dwarf Dubai’s public-record liabilities of $47bn (€35bn, £28bn) say they can be relied on to bail out struggling Dubai institutions....

Perhaps Abu Dhabi's interests are reinforced by experience with the outside influence the alternative might bring. In his book, Dubai: The Vulnerability of Success, Christopher M. Davidson discusses the episode in Sharjah in the 1980s (p. 254):

[A]lthough by the late 1980s Sheik Zayed had stepped in and taken care of Sheik Sultan's debts, this was not enough to prevent the collapse of Sharjah's four commercials banks in 1989 after the Sharjah government defaulted on loans of over $500 million. Most worryingly, the UAE Central Bank was unable to intervene and the door was left open for a Saudi consortium to step in and provide a rescue package. Significantly, for Sharjah, this financial assistance came at a considerable price, as Saudi Arabia gained much greater influence in the emirate....