The Impact of Oil Prices on the Banking System in the GCC
24 Pages Posted: 9 Dec 2016
Date Written: August 2016
This paper examines the links between global oil price movements and macroeconomic and financial developments in the GCC. Using a range of multivariate panel approaches, including a panel vector autoregression approach, it finds strong empirical evidence of feedback loops between oil price movements, bank balance sheets, and asset prices. Empirical evidence also suggests that bank capital and provisioning have behaved countercyclically through the cycle.
Keywords: Oil prices, Cooperation Council for the Arab States of the Gulf, Banking sector, Bank capital, Non-performing loans, Panel analysis, Vector autoregression, Econometric models, Macro-financial linkages, nonperforming loans, panel vector autoregression
JEL Classification: C63, E44, G21, G28
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