Before the fateful weekend of September 13-14, 2008, the hot topic on all bankers’ minds in the GCC was how to tackle inflation. Every country in the Gulf was battling ubiquitous, long-lasting and soaring inflation rates and deciding if they should de-peg their local currencies from the dollar. By mid-September, the picture was no longer so black and white — banks in the Gulf, like everyone else in the world, were scrambling to come up with emergency funds to mitigate lending restrictions and to guarantee bank deposits in order to ease the credit crunch they were facing. While the economies of the GCC were hoping the international crisis would blow right by them, Standard & Poor’s noted that, “recent events have shown that as these economies have opened up to the rest of the world in recent years, so too have their vulnerabilities to global economic conditions.” Merrill Lynch expects
