Transparency looks set to be the only winner in the fallout from the Algosaibi and Saad groups.

Exactly what has happened at the Saudi firms at the centre of a corporate scandal rocking Saudi Arabia is still not clear.

What is clear, however, is that it has changed how family owned companies in the region will be able to do business.

The practice of “name lending” has been widespread in the Gulf, where companies have been able to borrow money based solely on their name recognition and reputation.

But as the dispute between Algosaibi and billionaire Maan Al-Sanea moves into a New York court room and banks brace themselves for losses amid debt restructuring at the two companies, privately held firms are going to have to become more open or face having their financing cut off.

Friday’s move by Algosaibi to pursue its claims against Al-Sanea through the courts marks a departure from the private culture of the region’s family owned companies.

So private are they that many Gulf firms do not even have a public relations department for media professionals or other people seeking information about them. (A well known retailer recently fired its entire media relations team – tellingly, without informing the media about it.)

That privacy has extended to the debt markets, where the same companies have been unwilling to communicate key financial information to banks, credit rating agencies and other financial institutions.

Banks across the region are now feeling the effects of that secrecy, as names that were previously thought unsinkable default on bank loans and bonds.

The UAE central bank has said the country’s lenders have “significant” exposure to the Saudi companies, and has asked all banks operating in the country to inform it of the size of any loans extended to them.

Omani banks are the only ones in the GCC to have publicly announced their exposure to the beleaguered conglomerates.

Other banks would do well to follow their example and provide the market with some of that transparency their borrowers seem to lack.

Buried on page 34 of yesterday’s edition of The Times was news that should have knocked MP’s expenses and even Jordan and Peter Andre’s divorce off the front page of UK newspapers.

The credit crunch has ended.

The London interbank offered rate (LIBOR), the rate at which banks lend to each other, fell to levels last seen in early 2003, and around one quarter the level of 2005 when subprime mortgage defaults rattled the US banking sector and set in chain events that led to the collapse of Lehman Brothers a year later.

The spread between the UK Bank of England base rate and Libor has also narrowed to 2007 levels, still not back to the razor thin spreads seen at the height of the credit splurge of 2005, but low enough to prompt respected economists and bankers to suggest “normal” lending should now resume.

The GCC banking sector is also returning to normal. The three month Emirates interbank offered rate (EIBOR) dropped to 2.4875 today, down from a peak of 4.7875 in October last year. The Saudi Arabian interbank offer rate (SAIBOR) is down to 1.13 percent after averaging 3.37 percent last year.

The technicality of whether the credit crunch is over or not may be of little interest to the average man on the street. But it is more than a mere academic question.

Interbank rates directly affect current and future home owners in the UAE. HSBC offers tracker mortgages of 4 percent above EIBOR, making home loans available today at 6.5 percent 2-3 percent lower than the banks variable rate of 8.5-9.5 percent, depending on the size of a customer’s deposit.

The new company that emerges from the merger of Islamic lenders Amlak and Tamweel is expected to open within weeks with competitive mortgage deals.

Lending is beginning to become cheaper and more affordable at the same time.

It is unlikely that lending to businesses and individuals will return to 2007 levels any time soon. Nor should it. Lending should be made on the conservative calculation of customers’ ability to service loans, and should be secured on assets that are properly valued or on salaries that can be reasonably expected to continue.

2007 lending was based on the price of real estate that was assumed to be permanently increasing, and on salaries that were expected to rise, uninterrupted, forever. The banks will not make the same mistake any time soon.

So while you may be able to wave goodbye to the credit crunch, you have to accept that living within your means in a new age of austerity is not going away any time soon.

Negative press coverage will make Dubai a better place, it’s the international consultancy firms who flocked to the city in the boom years that should be worried, claimed one of the region’s leading businessmen at the World Economic Forum in Jordan.

“I think Dubai is getting the best consulting for free from the media. In a crisis you don’t have a lot of funds to start with, so if you can get some criticism and consulting for free, that’s good,” said Sheikh Khaled bin Zayed Al Nahyan, the chairman of Tamweel, during a panel debate.

Not all Arab business leaders are known for their high tolerance of media criticism, but Sheikh Khaled urged his peers to use any negative publicity to their advantage.

“Some of it is true, some of it is not true, but I think we have enough wise people in Dubai to look at it and channel it in the right direction,” he said.

Sheikh Khaled, who is also the chairman of insurance provider Salama and the executive committee of the Dubai Economic Council, apologized to a Bain & Co consultant on the panel before saying: “This is not coming from one consulting firm alone. These are people who have experienced Dubai, who came to Dubai whether they like us or hate us, and they are telling us about issues that they have seen

“So thank you to all the media that has criticized Dubai.”

Nasser Al Shaikh, the former head of Dubai’s finance department who was pulled from his job on Monday, said the media coverage was positive in that it showed that people around the world are now interested in hearing Dubai’s story.

“Of course we don’t agree with a lot of the coverage we have been getting lately. If I look at some of the stories about cars being dumped in Dubai’s airport, it started with a few hundred, all of a sudden it reached 11,000 cars.

“I remember calling His Highness Sheikh Ahmed bin Saeed Al Maktoum [president of the Dubai Department of Civil Aviation] and asking him: ‘What’s the capacity of the parking lot?’”

Coverage of Dubai in the international media is now starting to become more balanced, he added.

“We are seeing more balanced coverage, because what more bad stories can they write?”

I love the Dubai Land Department web site. It is a treasure trove of hard facts that often make a mockery of journalists and so called experts who spend too much time listening to people with vested interests, and not enough time searching for evidence.

Real estate prices are a classic example. If you listen to estate agents, they will tell you that prices are holding firm, particularly for prime locations like Dubai Marina and Palm Island Jumeirah.

If by firm they mean small and increasingly easy to swallow, I might agree. For example, there was a flurry of sales of Jumeirah Palm Island apartments registered with the Dubai Land Department today (Thursday).

Five identical 1144 square feet apartments were sold, presumably to a canny professional speculator, for AED600,000 each. That’s AED524 per square foot.

This is on the same day that nearly identical properties are for sale on the Better Homes web site at almost treble that price. Three 1184 square feet apartments are available today with prices of AED1.44 million, AED1.7 million and AED1.93 million; an average price of AED1.69 million, or AED1427 per square foot.

If you are in the market for a cut-price apartment, let the Dubai Land Department be your guide.

The Dubai Land Department also provides historical data that might help you make up your mind on whether the Dubai real estate market has bottomed out.

The graph above shows the value of land sales in Dubai since the beginning of 2005. It plots the absolute classic path of bubbles throughout history as speculators join professionals in a market and drive prices up to astronomical peaks before panicking as the market turns and offloading assets at almost any price.

Interestingly, the low point of the graph was in December 2008, since when it has been creeping upwards. It is too early to assume this upward trend will continue, but the near vertical fall that began in May last year (not September as many still believe) ended several months ago.

Not only is the broad economy: oil, trade, manufacturing, showing signs of recovery, even the basket case that is Dubai real estate appears to be over the worst.

I know I’ll be accused again of being some sort of apologist for the Dubai establishment, but there are hard facts that suggest the green shoots of recovery have been around for some time already, but only if you know where to look.

Too much Uninformed speculation is making it close to impossible to asses with any degree of accuracy where the GCC finds itself in terms of an economic downturn or recovery.

I wrote two days ago that I feel the worst of the regional downturn is fast approaching, and data will begin to demonstrate this to be the case as we emerge from what I expect to be a brutal summer slowdown.

The International Monetary Fund appears to agree. In its World Economic Outlook report, published yesterday (http://www.imf.org/external/pubs/ft/weo/2009/01/index.htm), it stated that the UAE, Saudi Arabia and Kuwait would collectively contract by less than 1 percent this year.

In fact, if you add up all oil exporting countries in the Middle East, which the IMF lists as Bahrain, Iran, Kuwait, Libya, Oman, Qatar, Saudi Arabia, UAE and Yemen, the organisation predicts that the collective economies will grow this year by a healthy 2.2 percent.

Given the severity of the slowdown in the first quarter, fuelled mainly by year-on-year declining oil revenues - not the collapsing Dubai real estate prices over which the Dubai-based media obsesses - it is reasonable to extrapolate that the rest of the year will add up to relatively benign conditions if the GCC is valued as a whole.

The IMF may not have covered itself in glory in recent times when it comes to forecasting, but for now it is probably the best guide we have. At least, unlike my esteemed colleague Anil Bhoyrul (http://www.arabianbusiness.com/553440-why-rob-is-living-in-neverland), it recognises that there is a great deal more to the GCC economy than the construction sites of Dubai.