Although we needed to place two wholesale banks into administration in the course of 2009, these events did not have a spill-over effect to the wider financial system. In fact, the financial markets seem to have taken comfort from the prompt and effective action taken by the CBB in dealing with these two problem banks.
In Bahrain, as in the rest of the world, the impact of the financial crisis was felt first through a withdrawal of liquidity, especially in US dollars. In the final quarter of 2008 we faced a situation in which our financial institutions were facing liquidity pressures, owing to the market reaction to the Lehman Brothers failure.