Responsible finance is the new mantra for the banking industry, members of the Bahrain Association of Banks (BAB) were told last night.

Citi chief executive officer for Europe, the Middle East and Africa Alberto J Verme said at the BAB annual gala dinner at the Ritz-Carlton Bahrain Hotel and Spa that banks should now only operate in the interest of the common good and that speculative operations should be banned.

The event was patronised by His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Economic Development Board Chairman, and attended by more than 200 guests.

HRH the Crown Prince delegated Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa to attend the BAB dinner. Central Bank of Bahrain Governor Rasheed Al Maraj also attended the event, which is considered the biggest gathering of bankers and financiers.

BAB chairman Mayank Malik delivered a speech thanking HRH the Crown Prince for patronising the event for the fourth time.

'This reflects his firm belief in the vital role played by the banking and financial sectors in spearheading the national economy and exploring new sources of revenues,' Malik said.

He also hailed HRH the Crown Prince's vision which ushered in a new philosophy in managing the economy and ensuring its diversification.

Verme said that new regulation should be enacted to guide more rigorous compliance with capital adequacy, liquidity and transparency standards.

Fiscal stimulus packages should remain in place in the short term but at the end of the day, there must be a consensus that only diversified economic behaviour will allow countries to weather the next storm through expansion of the private sector, exports and consumption and increased investment in human capital and infrastructure to raise competitiveness.

'Financial innovation should not be discouraged. However, simplicity should become the new paradigm, if you can't explain it to the common person, then it can't be that good!' he said.

'Courage and decisiveness are required by leaders, helping them to cope with the brutal facts up-front and prevent denial and panic from perpetuating market volatility, the EU bailout package for Greece simply took too long!'

'In the aftermath of the current crises, each of us in this room, in each of our respective fields, should have two major focuses - our cash flow generation capacity and diversifying our sources of funding,' he said.

'Cash has, and always will, remain king, and its prudent management will always produce predictable results and enhanced management credibility.

'The Bahraini banking sector is one of the most liquid and best capitalised in the region, we are in good shape!

'In Bahrain, we enjoy an A/A2 credit rating, have access to all currencies and an average maturity profile of eight years for our public debt.

'In addition, companies listed at the Bahrain Stock Exchange, have lower leverage ratios than others in the region and have used a variety of sources to fund capital expenditure and acquisitions.

'We must increase our competitiveness through further investment in human capital, infrastructure projects and enhancement of our telecommunications,' he said.

'Over the last two decades significant strides have been made in all of these areas, we should be proud of our achievements.

'On leadership, we must continue to embrace globalisation, further understand our relative standing, both within the GCC and globally, and turn challenges into opportunities. Small is beautiful yet big is necessary!'-TradeArabia News Service