The past 20 years have proved tumultuous times for the Middle East's banking community. Soaring oil prices in the 1970s encouraged many institutions to venture into the international markets, and capital was moving in a steady flow out of the region. In the mid 1990s, the financial environment presents a different picture. Capital flows have reversed and the banks are concentrating on their local markets where there is an increasing need for private capital to finance development.

The challenges for banks in the years ahead, and the manner in which they are being addressed, are comprehensively surveyed in Banking in the Middle East, a book published by the Financial Times, as part of their Financial Reports series*. 'One effect of these overarching changes in the Middle East economies has been to increase the range and depth of local banking markets,' the author writes. 'The development of Middle East financial markets is...a key element within the (economic) reform process as a whole.'

The book catalogues the new financial instruments which are emerging in the various markets of the region, including the Gulf, North Africa and the Levant. It also gives an account of the regulatory environment in which the banks operate. The issues are considered in general terms, and in chapters covering in detail each of the region's banking communities.

Andrew Cunningham, the author, has followed developments in the Middle East financial markets as MEED's finance writer, and then for the Cyprus- based newsletter Middle East Economic Survey. He now works in the recently established Limassol office of Moody's Investors Service, the US ratings agency (MEED 24:3:95).

Banking in the Middle East, Andrew Cunningham, published 1995 by FT Financial Publishing, London.