The Arab World’s banks are better prepared to face any fallout from the global sovereign debt problems than they were during the financial crisis in 2008. Back then, the region’s financial institutions were hit hard, which played a major role in the overall economic slowdown. Fortunately, the region’s financial institutions’ exposure to foreign assets and liabilities has fallen sharply over the past two years. What’s more, banks have taken appropriate provisions against non-performing loans, and increased their capital base. Therefore, at least from the perspective of the financial sector, the Arab countries are in a strong position.
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