Changes in Gulf banking industry after global financial crisis Research Paper

Changes in Gulf banking industry after global financial crisis - Research Paper Example These economies experience some degree of vulnerability in the international market. The third segment of countries in the gulf region consists of the countries that have high demographic pressure, low functioning social safety nets and low levels of economic growth (Sharif, 2006). Social and economic crises within these countries have hindered their economic growth and they have been exposed to the rages of financial crisis. There are fewer countries in the third group than in the first and groups, but these countries are worse affected during the financial crisis. The countries in the third group include Sudan, Mauritania, Yemen, Djibouti, Comoros and Somalia. These countries received very little international support during and even after the crisis ended. Hence, the governments of these countries have been serious measures to improve the banking and financial systems in their own countries. Islamic banking in the contemporary finance world The banking industry in the gulf region has passed through a period of major improvements over the period of last five years. Over the years, Islamic banking industry has matured and has become a viable competitor of the conventional commercial banks operating in the Middle East as well as in the South East Asian countries (Koldertsova, 2010). At the global level, the banking system of the gulf region has increased in importance. The Middle East acts as the core launch pad for the promotion of the system of Islamic banking in the Western financial markets and business culture. The following section has been devoted to the study of the changes that have taken place in the banking industry in the gulf region after the global financial crisis. Changes in Gulf banking industry after global financial crisis Technological... Conclusion The effects of the financial crisis have to be considered by the policy makers while making plans for the future and improving the management systems internal to the organizations. It is important that banking and financial sector of the gulf economies have to be transformed and integrated in to the main stream financial system of the globe. It is, therefore important that the challenges in these economies are identified and the future prospects are determined with reference to the resources available to the economies for dealing with the challenges. In this regard, past experiences regarding failure of the banking industry have to be truly accounted for. The system of Islamic banking has spread from the gulf region and entered the practice of banking of the other developed countries in the world, such as Australia, the United Kingdom, the United States of America and Canada (Venardos, 2006). After the financial crisis, this system has become more concerned about the ethical values o f financial transactions and has simultaneously increased its flexibility; so as to compete with the conventional interest based financial system. As a whole, the banking and finance industry in the gulf region has undergone certain developments and has become an exemplary finance practice in the global market (Khan and Bhatti, 2008).