Gulf of Woes: Banks decline and fall

Banks decline and fall

When the OPEC oil cartel was at the height of its power in the 1970s and early 1980s, Persian Gulf banks flourished like palm trees in a desert oasis. Arab governments, rich on oil revenues, were financing projects ranging from airports to universities, and the influx of money caused bank assets to grow 20% a year. Newly prosperous gulf families built banks as status symbols to impress their neighbors. The United Arab Emirates, which has a population of 1.3 million, had 53 banks in operation last year. Said an American economist who has studied the financial development of the Middle East:...

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