Sunday, March 02, 2008

Bahrain as the Financial Capital

Sources: Economic Development of Bahrain (EDB)

Bahrain is solidifying its reputation as the financial capital of the Middle East by the unyielding formation of the Central Bank of Bahrain (CBB). In Bahrain alone, there are 340 financial institutions. These institutions include commercial banks, investment banks, leasing banks, insurance companies, fund managers, legal services, financial consultants, international regulatory agencies, and real estate investment trusts.

The CBB, which was formerly the Bahrain Monetary Agency, has played a major role in maintaining the reputation as the paramount banking and financial services center. It is widely recognized that the services provided by CBB surpass any other central bank in the Arab world. The CBB’s success in regulation, innovation, non-discriminatory treatment, license management, and operational excellence cannot be compared to any other financial institution in the Arab nation.

More recently, specialized agencies have been created in Bahrain. These specialized agencies make certain that the appropriate international regulations are being used and that these regulations also continue to help expand and develop the international financial industry. Some of these industries include Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the General Council for Islamic Banks and Financial Institutions, the International Islamic Financial Market, the Liquidity Management Centre, and the International Islamic Rating Agency.

In addition, Bahrain is the first country in the Gulf market to launch and establish the captive insurance market. It is also a major regional insurance and reinsurance center. Two major Islamic insurance companies are based in the center of Bahrain. Bahrain has continued to expand its solid reputation by constructing the Bahrain Financial Harbour. The construction for the project has reached $1.3 billion, but is well worth it for Bahrain to keep the position as the financial capital of the Middle East. This new development will create a unification of all financial services, including the Bahrain Stock Exchange and a new Bahrain International Insurance Centre.

Question: Are Bahrain’s financial institutions influenced by political pressure? If not—what influences affect the financial institutions?

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