A proposed new law to regulate
- Bahrain ‘s financial industry is being finalised, HE Shaikh Ahmed bin Mohammed Al Khalifa, governor of the Bahrain Monetary Agency (BMA) says.
A draft of the new law is awaiting presentation to Bahrain ‘s cabinet, after which it will go through the due process before it can be implemented.
“We would like to see it materialise as soon as possible,” Shaikh Ahmed claims.
The new law will reflect BMA’s new status as sole and single regulator for the entire financial services industry, comprising banks, insurance companies, investment firms, other specialised financial services providers as well as the capital market.
The new framework will replace the BMA Law of 1973 and the Insurance Law of 1987.
“It will help to reduce the regulatory burden and help us design a single regulatory tool to cover all areas of the financial sector,” he says. “It will also help us devise a single approach to issues of corporate governance, money laundering and banking regulation.”
Under the new law, the BMA will also undergo a name change to become the Central Bank of Bahrain, which will better reflect the expanded role of the Agency, says Shaikh Ahmed.
He expresses optimism for growth prospects for the region’s economy, in general, and Bahrain ‘s financial industry, in particular, now that the war in Iraq has ended.
“The run-up to the war was long and it will take time for things to wind down but we are starting to see positive developments taking place,” says Shaikh Ahmed.
Buoyant oil prices will also help attract investment to the region.
Shaikh Ahmed points out that Bahrain ‘s financial services industry is a major component of the domestic economy, contributing 19% to gross domestic product (GDP), compared with 2.5% in many other countries.
The BMA is actively seeking to advance the financial sector by implementing a comprehensive plan aimed at maintaining Bahrain’s leading position as regional provider of financial services and ensuring further growth and expansion in the coming years, he points out.
The plan focuses on the strategic development of seven asset classes, namely debt and equity capital markets, insurance, Islamic finance, corporate and private banking and remote services.