IMF Working Papers

What Influences Bank Lending in Saudi Arabia?

By Ken Miyajima

February 13, 2017

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Format: Chicago

Ken Miyajima. What Influences Bank Lending in Saudi Arabia?, (USA: International Monetary Fund, 2017) accessed September 26, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Determinants of bank-level credit growth in Saudi Arabia are investigated by applying a panel approach to data spanning 2000–15. Strong bank balance sheet conditions, economic activity, and oil prices support bank lending. Reduced bank concentration appears to have helped. Lending remained robust in 2015 despite oil prices having declined, helped by strong bank balance sheets and a reduction in bank holdings of “excess liquidity”. To support bank lending in the period ahead, bank balance sheets need to remain strong. Fiscal adjustment and a reduced reliance on banks to finance the budget deficit would support credit provision to the private sector.

Subject: Asset and liability management, Bank credit, Banking, Capital adequacy requirements, Credit, Excess liquidity, Financial regulation and supervision, Money, Oil prices, Prices

Keywords: Bank balance, Bank credit, Bank credit growth, Capital adequacy requirements, Credit, Excess liquidity, Fed funds rate, Fixed-effects panel model, Global, Government bond, Macro-financial linkages, Oil price, Oil price growth, Oil prices, Private sector, WP

Publication Details

  • Pages:

    26

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2017/031

  • Stock No:

    WPIEA2017031

  • ISBN:

    9781475578669

  • ISSN:

    1018-5941