Trillion dollar GCC market opens banking opportunities

Speaking at the event at the Gulf Hotel in Manama, Shaikh Mohammed said that banking has been one of the success stories of the emerging Gulf and Mena economies. While people talk of the emergence of China and India, the six nations of the Gulf Cooperation Council (GCC) alone are on the verge of becoming a one trillion US dollar market. For banks, as with other international companies, accessing this market from a single location has never been easier or more profitable, he added.

He said:

"The GCC is becoming a single market. In its relatively short life the GCC has encouraged the progressive dismantling of barriers to cross-border banking, investment and trade. The growing wealth of the region is reflected in the growing sophistication of businesses and the growing wealth of individuals and families. They have rising expectations and expect a broader portfolio of services. All this creates new opportunities for banks and bankers in our region."

He added, "So while we must take the global banking crisis seriously, there is no cause for pessimism about the future of Middle East banking. We hear a lot - maybe too much - about the failing of banks in the Western economies. No region has escaped the effects but we know from experience that banks in our region can be a force for good and an engine of growth for the whole economy."

With the financial services sector remaining crucial to the Middle East in its continued development, Shaikh Mohammed stressed the importance of creating a banking environment that is both safe and attractive. The legal and regulatory environment must be supportive, firm and fair and provide the external support to make the business of banking easier, he said.

"Sensible bank regulation is imposed by a central bank or regulatory authority only after consultation with the industry, so the rules are practical as well as prudent, safe and consistent. Banks are entitled to expect much of host governments, regulators and development authorities which create the climate within which they operate. That is why private and public bodies must cooperate in a partnership for prosperity, together putting in place the building blocks to ensure our best days lie ahead," he added.

Bahrain itself is the most established financial centre in the Gulf and has a track record and reputation for effective regulation at international standards, one of a number of domestic measures designed to strengthen the long term sustainability and prosperity of the Kingdom. The Central Bank of Bahrain (CBB) is widely acknowledged and respected as the best and most comprehensive regulator in the region.

Last month at the World Economic Forum (WEF) on the Middle East, Shaikh Mohammed said, "In a crisis, you see a flight to quality; a flight to values that have stood the test of time. Our tradition of prudent financial regulation has done so better than the US and UK models. It may be that our combination of tradition and reform - both based on ethical values - deserves a second glance."

Over 250 heads of banks from across the Middle East attended the awards ceremony which was held under the patronage of the CBB. Now in its ninth year, the event is widely recognized as the most prestigious event in the banking and finance calendar, providing the benchmark for successful financial institutions.