Bahrain Monetary Agency governor Rasheed Al-Maraj brushes off competition from the GCC region’s up-and-coming financial centres: Manama – with 360-plus banks in place – “is in an advantageous position – it’s not new to this business,” he tells Emerging markets. The BMA’s reputation as a solid regulator has long been one of Bahrain’s unique selling points but, Al-Maraj says, “It’s not the number of regulations you have, it’s the standard of the people behind it, and Bahrain has very good people.”
Other Gulf centres are jostling for business, but Al-Maraj says there is still big interest from institutions seeking new licences from the BMA, which since 2002 has been the regulator for all financial sectors in Bahrain. But there will be no free-for-all in letting institutions into the Bahrain offshore or onshore markets. “There is a very strict regime when licensing new banks – we reject applications too,” the governor says: “We look at checks and balances and require them to present this to us. What applies to a big bank, applies to a small one.”
Manama is leading the way in attracting new Islamic banks: the European Islamic Investment Bank in April announced that it would open a Bahrain office. According to Al-Maraj, the BMA also “strongly supports” the mutual funds industry. He reports that by end-2005, 1,882 funds were registered in Bahrain, of which 86 were locally incorporated, representing over $2.8 billion-worth of assets under management.