Banking and Insurance in the GCC Countries: Is there Regulatory Convergence with the EU?

The financial services sector plays a pivotal role in the quest of the GCC countries to diversify their economies. While the sector is dominated by commercial banks that provide traditional banking services, non-bank financial institutions, insurance and capital markets are still underdeveloped, albeit with significant differences between the individual countries. Despite efforts to revise the regulatory and supervisory frameworks in recent years, the GCC countries have not been able catch up with the more developed EU financial markets. This paper, written by the CEPS team for the Sharaka project, provides an overview of banking and insurance in the GCC countries in comparison with the EU27, assesses regulatory reforms and the degree of convergence, and provides recommendations to strengthen EU-GCC cooperation and integration in financial markets.