Since mid-2015 the main concern within the GCC’s banking sector has been liquidity. As 2015 financial results and Central Bank statistics are posted, analysts will be able to study the extent to which liquidity has tightened, and how different banks have fared.

Banks can benefit from falling liquidity by raising their margins on loans as competition eases off. This could support profits. But to keep lending they need to keep attracting deposits, by competing on interest rates.

The figures to watch are loan and deposit growth, as well as loan to deposit ratios. The other, more expensive option, is to issue more bonds. But the liquidity situation is pushing coupon rates higher.

Last year was a year of transition between a banking sector boom fuelled by very high liquidity due to high oil prices and a more conservative environment.

Borrowers who did not already secure cheap financing and refinancing have missed their chance.

Central banks monitored the situation, but only the UAE took action, informally restricting shareholder dividends to under 50 per cent of profit.

As the economic situation in the GCC weakens, central banks may have to take an active role in 2016. This will be more difficult while the US Federal Reserve is raising its interest rates, if states want to maintain dollar pegs.

Liquidity, to a certain extent, depends on confidence. Central banks need to make the right moves to maintain this.