The Financial Markets

Abstract

Today, the Saudi financial markets, and the banking sector in particular, are among the financially strongest in the Middle East and, as a group, one of the most profitable in the world. This has been confirmed by independent organizations such as Standard & Poor (Jagannathan, 2002) as well as specialist institutions such as the Middle East Economic Digest (MEED), which have ranked Saudi banks as consistently performing at the highest levels of profitability (MEED, 14 May 1999, 14 March 2000, 22 February 2002). In Chapter 4, we noted that the Saudi banking system is supported and supervised by a well-respected regulatory body, the Saudi Arabian Monetary Agency (SAMA), and that the Saudi banking sector has not been beset by any major financial panic or scandal. As we will see, the Saudi banking and financial systems have derived their characters from American and European institutional developments, with critical underpinning from Islamic economic precepts.