Changing Global Regulation Means Banks Must Adapt

Manama: As part of an ongoing series of public seminars hosted by the Bahrain Economic Development Board (EDB) and BIBF, a session titled, “What do global financial sector reforms mean for the Bahraini economy” was held at the International Institute for Strategic Studies (IISS).

The panel discussion brought together high level speakers from the financial sector, who were able to assess the wave of regulatory reforms adopted internationally in response to the global economic crisis, and the impact of these changes on financial services in the region as well as the broader implications for the Bahraini economy.

Panelists participating included Dr. Jarmo Kotilaine, Chief Economist, EDB, Mr. Richard Ellis, Advisor, Banking Supervision, Central Bank of Bahrain (CBB), Mr. Hassan Jarrar, CEO Standard Chartered Bank, Bahrain, and Professor Sudhakar Raju, Miller Chair of Finance, Hellzberg School of Management and Harvard University, USA.

Dr. Jarmo Kotilaine said: “The increase in global regulatory pressures is coming at a time when regional investment and economic development needs are at an historic peak. This creates the need for new solutions and mechanisms for pooling capital. Innovation by regional financial institutions is becoming more important than ever.

“Alongside these challenges, though, there are excellent opportunities available. Populations are growing rapidly, and investment in infrastructure projects, SMEs, and diversification is growing. However, in order to play a full part in this, banks will have to widen their activities as businesses look for different sources of funding.”

Mr. Richard Ellis noted: “Although the amount of new regulations is huge, they create opportunities for financial institutions which can comply and help their customers comply. Opportunities are there and financial institutions will enhance their earnings in the longer term if they grasp these opportunities.”

Mr. Hassan Jarrar also commented: “Ever since the 2008 global financial crisis, the banking industry worldwide has seen nothing short of an avalanche of new regulations. Such regulations, though mostly originated in the US and Europe, have, and will continue to have direct implications to the rest of the world, including Bahrain and the region at large. As a result, the banking industry has been undergoing a significant transformation the likes of which has not been seen since Dodd-Frank!”
Professor Sudhakar highlighted the importance of understanding the manner in which international market forces and financial regulations impact the Kingdom, as the Bahraini economy becomes more diversified and globally focused. He added that the seminar attempts to engage a broad audience in this discussion.

Bahrain is one of the region’s leading financial centres, home to 405 registered financial institutions, including 177 banks with total assets of $186bn. The sector employs more than 14,000 people, of which nearly two thirds are Bahrainis.

Economic Development Board

Tel: +973 17589966

Email: nc@bahrainedb.com