Bahrain bank set to tighten liquidity rules

Bahrain’s central bank is preparing to tighten its rules on liquidity, after troubles at two Saudi-owned banks forced the regulator to take control of both institutions in July.

Under the proposed changes, published on the Central Bank of Bahrain’s website, banks will have to increase the amount of liquid assets held, submit to more frequent checks by the CBB and ensure that their long-term lending obligations do not starve them of ready cash in a crisis.

Last month the CBB placed both Awal Bank and The International Banking Corporation (TIBC) in administration, citing a large shortfall in their assets compared with their liabilities.