Benchmarking the Financial Sector in the Southern and Eastern Mediterranean Countries and Projecting 2030 Financial Sector Scenarios

This paper aims at devising scenarios for the development of the financial system in the southern and eastern Mediterranean countries (SEMCs), for the 2030 horizon. The results of the simulations indicate that bank credit to the private sector, meta-efficiency and stock market turnover could reach at best 108%, 78% and 121%, respectively, if the SEMCs adopt the best practices in Europe. These scenarios are much higher than those of the present levels in the region but still lower than the best performers in Europe. More specifically, we find that improving the quality of institutions, increasing per capita GDP, opening further capital account and lowering inflation are needed to enable the financial system in the region to converge with those of Europe.

Rym Ayadi is Senior Research Fellow at the Centre for European Policy Studies (CEPS) in Brussels and Coordinator of the MEDPRO project, Emrah Arbak was Researcher at CEPS, Sami Ben-Naceur is Associate Professor at the University of Tunis and Willem Pieter De Groen is a Researcher at CEPS.

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Date of publication: 
Fri, 22/03/2013
Rym Ayadi, Emrah Arbak, Sami Ben-Naceur, Willem Pieter De Groen
Institutions: CEPS, FEMISE