Bahrain Key Hub
by Arthur MacDonald
11 Feb 2009

MANAMA: Bahrain's position as the financial capital of the Middle East has been boosted by the global economic crisis, according to two senior financial services experts. Billions of dinars poured into the region in the first half of last year as speculators sought to take advantage of spiralling inflation and rumours that some GCC countries might drop the dollar peg.

However, Bahrain is said to have been one of the few countries that were not hit hard when that money was pulled out.

"We saw a lot of hot money come into the region at that time as people were prepared to speculate on a possible change in the value of local currencies, particularly in the UAE and Qatar," said Securities and Investment Company (SICO) head of asset management Shakeel Sarwar.

"But that did not happen here because the Central Bank of Bahrain (CBB) had a far more strict regulatory system in place.

"When the financial crisis arrived and the speculators withdrew their money, that left financial institutions elsewhere looking at major liquidity problems that Bahrain's superior financial regulation managed to avoid."

MEGA Brands managing director David McLean added Bahrain was now seen as a key place for the regional financial industry to gather to discuss issues raised by the credit crunch.

"Events like the insurance forum and other financial conferences and exhibitions that we organise in co-operation with the CBB, like the World Islamic Banking Forum, have seen record numbers of delegates turning up since the economic turmoil," said Mr McLean, whose firm organised the fifth Middle East Insurance Forum that ended at the Gulf Hotel yesterday.

"Elsewhere in the region events are being put on hold or put back because of the global crisis, but Bahrain events have attracted even more people because this is the centre where the financial industry sees it has to come to thrash out the way forward." The insurance forum witnessed 400 participants this year, compared to 280 last year.

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