Regional Financial Integration in the GCC
IMF Working Papers, April 1, 2010
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Bibliographic details
- Authors: Raphael A Espinoza, Oral Williams, Ananthakrishnan Prasad
- Published: April 1, 2010
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451982589.001
Summary findings
- The study investigates the extent of regional financial integration in the member countries of the Gulf Cooperation Council (GCC).
- Limited volume data available suggests that regional integration is non-negligible.
- Bahrain and Kuwait investments especially are oriented towards the region.
- The development of stock markets in the region will also improve the extent of financial integration.
- Interest rate data shows that convergence exists and that interest rate differentials are relatively short-lived—especially compared to the ECCU, another emerging market region sharing a common currency.
- Equities data using cross-listed stocks confirms that stock markets are fairly integrated compared to other emerging market regions, although financial integration is hampered by market illiquidity.
Data, metrics, and scope
- Subject: Arbitrage, Financial integration, Housing, Stock markets, Stocks
- Keywords: GCC, price, Total GCC, WP
- Pages: 33
- Volume: 2010
- Issue: 090
- Series: Working Paper No. 2010/090
- Stock No: WPIEA2010090
- DOI: https://doi.org/10.5089/9781451982589.001
- ISBN: 9781451982589
- ISSN: 1018-5941
Implications and interpretation
- Regional investment orientation in Bahrain and Kuwait implies meaningful intra-GCC capital flows despite limited overall volume data.
- Improvements in regional stock market development are expected to enhance financial integration.
- Short-lived interest rate differentials indicate relatively fast transmission of monetary conditions within the GCC compared to the ECCU.
- Cross-listing of equities contributes to market integration but market illiquidity remains a key constraint to deeper integration.
Raphael A Espinoza, Oral Williams, and Ananthakrishnan Prasad. "Regional Financial Integration in the GCC", IMF Working Papers 2010, 090 (2010), accessed 9/16/2026, https://doi.org/10.5089/9781451982589.001