Banking and Finance in the Arab Middle East

During the last two decades commercial banking has been expanding more rapidly in the Arab Middle East than in any other area of the world. As recently as the early 1960s much of the region remained unmonetised and the existing financial institutions were small in size, catering primarily for the requirements of the limited domestic markets. The region's only financial links with the outside world were through foreign-owned banks, and no indigenous commercial bank had internationalised its operations to any significant extent. Apart from Beirut there was no centre which served wider regional needs, and even the Lebanese capital was of only limited importance internationally. Yet today the whole Arab Middle Eastern financial scene has been transformed, with a tremendous proliferation of local banks, a rapid expansion of branch networks, and an enormous widening in the range of financial services provided by indigenous institutions. The region's banks are now strongly represented in major international financial centres, and there are already twenty Arab Middle Eastern banks included in the world's top five hundred banks. At the same time, although expatriates still occupy many key positions in commercial banking, a new generation of bankers native to the region is playing a growing role in Arab finance. Overall a solid foundation for financial activity has been laid, and there is little doubt that, barring political catastrophes, the remainder of the present decade and the 1990s should witness further sustained progress