The second quarter of this year saw the GCC financial markets put up a show of considerable resilience in the face of elevated global economic uncertainty as the euro zone crisis deteriorated. In spite of recurrent volatility, regional trading and issuance conditions were marked by considerable continuity as compared to the far less stressful opening months of the year, reflecting the emerging consensus that the GCC is now one of the relatively safe havens in the global financial markets. This stability was particularly evident in the area of bank credit where continued growth in much of the region was underpinned by favorable macroeconomic conditions. Positive progress looks set to continue although signs are multiplying that last year’s post-crisis rebound in many countries may be gradually giving way to more stable market conditions. Even though especially Saudi inter-bank rates have edged up, largely in reflection of the growing demand for credit, the regional banks are strong and liquidity conditions benign. The UAE and Kuwait continue to lag behind, however, due to a combination of largely country-specific factors.