Impact of Financial Liberalisation on GCC and Malaysia Banks Performance: Quantile Regression Analysis

Nur Afizah Muhamad Arifin and Norhasimah Shaharuddin
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Nur Afizah Muhamad Arifin: Faculty of Business and Management, University Technology MARA, Malaysia
Norhasimah Shaharuddin: Faculty of Business and Management, University Technology MARA, Malaysia

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 5, 5959-5968

Abstract: This study investigates the impact of financial liberalization on the performance of banks in the Gulf Cooperation Council (GCC) countries. Over recent decades, the GCC economies have undergone significant financial reforms, including the deregulation of financial markets, privatization of state-owned banks, and the opening of the banking sector to foreign competition. These reforms aimed to enhance bank efficiency, increase competitiveness, and attract foreign investment. The study reviews existing literature to assess the dual effects of financial liberalization: while it has led to increased competition, improved profitability, and enhanced access to capital, it has also exposed banks to greater risks, including vulnerability to external market shocks and financial instability. Additionally, the paper examines challenges such as over-concentration in certain sectors and regulatory issues. The findings suggest that while financial liberalization has spurred growth and modernization in the GCC banking sector, it has also created new challenges that require robust regulatory frameworks to ensure long-term stability. This research contributes to understanding how financial liberalization shapes the dynamics of banking performance in emerging markets, particularly in the context of the GCC.

Date: 2025
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