TY - BOOK ID - 146593973 TI - Financial Stability in a Higher-for-Longer Interest Rate Environment The Case of the Middle East and North Africa AU - Alter, Adrian. AU - Hlayhel, Bashar. AU - Kroen, Thomas. AU - Piontek, Thomas. PY - 2024 SN - 9798400273391 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Asset requirements KW - Banking KW - Banks and Banking KW - Banks and banking KW - Banks KW - Business enterprises KW - Capital adequacy requirements KW - Capital and Ownership Structure KW - Commercial banks KW - Corporate Finance and Governance: General KW - Corporate Finance KW - Corporate sector KW - Credit KW - Currency crises KW - Depository Institutions KW - Economic & financial crises & disasters KW - Economic sectors KW - Economics of specific sectors KW - Economics KW - Economics: General KW - Finance KW - Finance: General KW - Financial crises KW - Financial Institutions and Services: Government Policy and Regulation KW - Financial institutions KW - Financial Markets and the Macroeconomy KW - Financial regulation and supervision KW - Financial Risk and Risk Management KW - Financial risk management KW - Financial sector policy and analysis KW - Financial services law & regulation KW - Financing Policy KW - Firm Performance: Size, Diversification, and Scope KW - General Financial Markets: Government Policy and Regulation KW - Goodwill KW - Informal sector KW - Macroeconomics KW - Micro Finance Institutions KW - Monetary economics KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - Money and Monetary Policy KW - Money KW - Mortgages KW - Ownership & organization of enterprises KW - Stress testing KW - Value of Firms UR - https://www.unicat.be/uniCat?func=search&query=sysid:146593973 AB - This paper assesses the state and resilience of corporate and banking sectors in the Middle East and North Africa (MENA) in a “higher-for-longer” interest rate environment using granular micro data to conduct the first cross-country corporate and banking sector stress tests for the MENA region. The results suggest that corporate sector debt at risk may increase sizably from 12 to 30 percent of total corporate debt. Banking systems would be broadly resilient in an adverse scenario featuring higher interest rates, corporate sector stress, and rising liquidity pressures with Tier-1 capital ratios declining by 2.3 percentage points in the Gulf Cooperation Council (GCC) countries and 4.0 percentage points in non-GCC MENA countries. In the cross-section of banks, there are pockets of vulnerabilities as banks with higher ex-ante vulnerabilities and state-owned banks suffer greater losses. While manageable, the capital losses in the adverse scenario could limit lending and adversely impact growth. ER -