Meanwhile, Saudi Stocks Crash Near 7 Year Lows

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Despite the Deutsche-driven bounce in Western markets on Friday, the ‘panic in The Kingdom’ that we highlighted earlier in the week is accelerating fast. Following demands from officials for banks to reschedule loans to clients affected by last week’s decision to cut salaries and bonuses for state employees, Middle-East bank stocks are collapsing and Saudi’s Tadawul Index is back near its 2009 lows

The weakness – despite crude strength – was driven by Saudi Arabia?s central bank decision to direct local lenders to reschedule the consumer loans of clients affected by last week?s decision to scrap the bonuses and allowances of many state employees. As Bloomberg reports,

The Saudi Arabian Monetary Agency, as the central bank is known, said in a statement on its website on Sunday that the step was part of efforts to ?reduce pressure on borrowers? whose income was cut by the government?s Sept. 26 package…

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