A working paper from the IMF investigates recent trends in bank lending in the Middle East and North Africa (MENA). The title says it all: “Recent Credit Stagnation in the MENA Region: What to Expect? What Can Be Done?”

Although focused on MENA, the paper presents a useful history of the frequency, scope and magnitude of recent credit booms (and subsequent busts) in a number of regions. For MENA itself, the authors make a few policy suggestions to limit the impact of future credit crises. Ultimately, they conclude, developing local debt markets as an alternative to bank lending will go a long way to bolstering financial systems in the region: “While pronounced bank credit cycles may be difficult to avoid in their entirety, their impact on economic activity might be lessened with a more diversified financial system”.