Some people also began to ask whether Bahrain should announce a general guarantee of deposits as so many other countries did in the weeks after the collapse of Lehman Brothers. Our view in the Central Bank was that a general guarantee of deposits was not needed. We were confident in the soundness and stability of Bahrain’s banking system.
We were also confident in the strength of our prudential regime. CBB rules and regulations and our directions to banks have constrained excessive risk-taking and we have, for example, ensured that banks are not over-exposed to any particular economic sector.