Countries in the Gulf Cooperation Council are facing the prospect of a credit crunch, as lending cuts from European banks and an unsophisticated network of local lenders combine to create a funding shortfall in the region, according to Moody’s Investors Services.

The ratings agency this morning published a report entitled 'GCC Banks: Funding Gaps could emerge as European banks scale back in which it analysed how much Saudi Arabia, Oman, Kuwait, Qatar, Bahrain and the United Arab Emirates rely on European banks for funding.