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The impact of the world economic crisis on the Middle East, and in particular on the countries of the GCC, was similar to the impact elsewhere in the West − collapse of the real estate sector, credit constraints, and economic contraction. The reaction of governments of the GCC was similar to the reaction of governments in the West − support of financial institutions and provisions of liquidity to the financial markets. Islamic finance has established itself as an important component of the commercial and financial sectors in these countries, so it is interesting to examine whether this segment of the market performed better or differently than the conventional segment. Even though its promoters have claimed that Shari’ah compliant investments would fare better in a financial crisis than conventionally structured and financed investments, there were in fact more similarities than differences in performance. Finally, when problems arose, it became clear that the legal systems in some of these countries were not adequate to deal with the restructuring of struggling companies, and as a consequence, insolvency laws were being examined in a number of jurisdictions, and the Emirate of Dubai introduced a decree that had the effect of imposing a more contemporary insolvency regime on its key state enterprise.

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Symposium: International Finance after the Crash: Regional Responses to the Global Financial Crisis