Publication: Transforming Finance in the Middle East and North Africa
Date
2020-06
ISSN
Published
2020-06
Author(s)
Arezki, Rabah
Senbet, Lemma W.
Abstract
This paper argues for a transformation
of finance to support the economic and social transformation
of the Middle East and North Africa. The paper first
documents the existing financial system in the region. The
system is heavily skewed toward banking, relative to
non-banking services, such as stock and corporate bond
markets, with significant heterogeneity across countries.
Second, the paper discusses the stance of macroeconomic
policy in the region, which has had important implications
for the destination, profitability, and quality of bank
lending and the limited evolution of the financial system.
Third, the paper explores the impact of technology on
financial development, with particular attention to
prospects for the development of fintechs. Entrenched
incumbency of banks has limited the role of non-bank
operators in fostering market contestability and fintech
development. The paper is a call to the authorities and
policy makers in the Middle East and North Africa to break
with the status quo and business as usual. It underscores
the need for a “moonshot approach” focused on establishing
the foundations of a new digital economy and its role in
promoting a well-functioning and inclusive financial economy
to support the development needs of the region.
Citation
“Arezki, Rabah; Senbet, Lemma W.. 2020. Transforming Finance in the Middle East and North Africa; Transforming Finance in the Middle East and North Africa. Policy Research Working Paper;No. 9301. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/33996 License: CC BY 3.0 IGO.”
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