Flip through the latest issue of Gulf Weekly.
Transparency in banking in many Gulf countries is still an issue, but less so in Bahrain, according to The Report: Bahrain 2008, which was launched last week.
In an article on how the subprime crisis had affected the region, it said Bahrain was host to some of the only banks to actually admit to subprime investments and losses.
'Many of the wholesale banks of Manama are involved in scanning the globe for new investment opportunities,' the report said.
'In the search to find diversified and balanced portfolios, some of them turned to the mortgage-backed securities now causing global turmoil.
'Gulf Investment Bank, one of biggest wholesale lenders in Bahrain announced a loss of $757.3 million in February, mainly due to subprime investments. Arab Banking Corporation said it wrote off $230 million. By March, the level of announced writedowns was close to $2 billion.'
Unlike Western economies, regional banks have adequate liquidity due to the high oil prices and are not as likely to suffer from credit worries, Central Bank of Bahrain Governor Rasheed Al Maraj argued in an interview in the report.
Talking about the subprime problem he said that regulators were not in a position to micro-manage the investment portfolio of banks.
"We are focused on making sure that licensed institutions adhere to regulations," he said.
"If licensees take risks that are contrary to their prudent limits, the burden cannot be put on the regulator. It is the responsibility of the management and board of directors."
