The Impact of Oil Prices on the Banking System in the GCC

24 Pages Posted: 9 Dec 2016

See all articles by Padamja Khandelwal

Padamja Khandelwal

International Monetary Fund (IMF) - Policy Development and Review Department

Ken Miyajima

Bank for International Settlements (BIS) - Monetary and Economic Department

Andre Oliveira Santos

International Monetary Fund (IMF)

Date Written: August 2016

Abstract

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

Suggested Citation

Khandelwal, Padamja and Miyajima, Ken and Santos, Andre Oliveira, The Impact of Oil Prices on the Banking System in the GCC (August 2016). IMF Working Paper No. 16/161, Available at SSRN: https://ssrn.com/abstract=2882598

Padamja Khandelwal (Contact Author)

International Monetary Fund (IMF) - Policy Development and Review Department ( email )

700 19th St. NW
Washington, DC 20431
United States

Ken Miyajima

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Andre Oliveira Santos

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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