Nonetheless, the high levels of capital adequacy of our banks has allowed them to absorb these losses and the banking system remains on a very solid footing. A further source of strength for Bahrain’s financial sector has been our position as a hub for Islamic finance.
Owing to the Sharia prohibition on speculative activity and the requirement that financial transactions be backed by real assets, the Islamic financial industry has been less affected by the global financial crisis than the conventional sector.