Over the past decade the Middle East's banking sector has become one of the fastest-growing in the world. Previously it had been under-banked, and in many countries state-owned banks remained the dominant players. The first wave of the global credit crisis did nothing to dent the region's confidence and ambition. Middle Eastern banks had virtually no exposure to US subprime or associated securitizations and derivatives. And with energy prices climbing to record highs during the summer of 2008, the economies of the region's resource-rich countries continued to expand. Cracks did appear, though. Competition in such over-banked countries as the United Arab Emirates (UAE) became intense, the consequences being either eroded margins, excessive risk-taking or a combination of the two. While the global downturn has hit banks right across the Middle East, there are stark differences between its very different sub-regions.
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