The Gulf Region: the new 'hub' of global financial power?
The oil boom of the last three years has served to highlight and accelerate growth in financial market activities across the Gulf region and in Islamic financial and banking activities overall. In the last couple of years, the GCC area has been one of the fastest growing parts of the world economy, after Asia. Booming economies and burgeoning wealth have strengthened the GCC's aspiration to develop global capital markets and global companies.
There is now a compelling case for building the infrastructure to expand services while justifying the cost. Investments in financial market capability have accelerated the development of a financial services industry in the region and introduced new instruments. In contrast to the past, much of the liquidity now stays in the Middle East, prompting banking and financial institutions to set up in the Gulf.
However, what policies are necessary to ensure financial stability and should global cooperation and international regulatory supervision be strengthened? Are the GCC countries likely to become global financial players? Are they likely to become part of the shift of financial power from the United States to the surplus countries?