Simulating Banking Sector Development in the GCC States

Abstract

We provide simulation results on the banking sector’s depth levels for the Gulf Cooperation Council (GCC) States. In this context, several relationships between four banking sector depth ratios and the banking sector determinants in the top quartile countries are considered. The emerging evidence suggests that Oman and Saudi Arabia are set to exhibit deepening in their financial sector whilst Bahrain and Kuwait are likely to be the beneficiaries from enhancing banking sector stability, efficiency, and competition, as well as improving their governance, institutional, and legal settings