Gulf financial institutions would have more protection against financial crime and fraud if the region adopted a single currency and harmonised banking laws, according to a senior representative of the European Central Bank (ECB).

Speaking at the 'Second Annual Fraud and Financial Crimes Forum' in Manama, the ECB representative was one of several industry figures, who shared his views at the event to call for harmonisation and improvement of GCC banking legislation.

After his speech in which he listed the threats of the 'moving target' of financial crime, the ECB official said the closer ties that come with a single currency and a single market could only help efforts to eradicate such illegal activities.

'Will it help to have monetary union and a single currency? The answer is yes of course it will - because the preparations and also the operating of monetary union all require so much co-operation between the key institutions like central banks. By necessity you will have a forum to tackle financial crime,' he said.

The official also told delegates at the forum, hosted by event organisers marcus evans at the Sheraton Hotel, that at present the GCC was lacking the equivalent of EU directives, which bind member states together against financial crime.

'If you look at the GCC, it is not so clear that the group has the same legal tools at its disposal. It is important that if the GCC proceeds towards monetary union that it will also have those powers to impose obligations in the area of counterfeiting and financial crime on the member states and perhaps also on individuals and companies,' he said.

'If you want to go towards monetary union you need to have some kind of treaty, like we had the treaty of Maastricht. I know they are working on it but I do not know at what speed,' he told the Gulf Daily News, our sister publication.

Another global expert based in Europe said it was time for the region's regulators to show 'the bite to go with their bark' when it came to financial crime.

'If I am a financial institution and I do not seen any prosecutions following my leads, and I do not get any feedback then it is not good. Banks and financial institutions worldwide are spending billions to be proxy policemen,' he said.

The expert said the fact that the region was home to so many nascent institutions presented it with a 'unique opportunity' to build modern infrastructure from scratch rather than find themselves in the position of banks in other regions who have to 'bolt on' 21st century innovations to infrastructure developed in the 1970s and 80s.

While the status of the single currency project may grab the headlines the expert said a common source of legislation for the financial industry should be the first priority.

Despite the challenges that remain the ECB official said he expected monetary union to be achieved.

'It is still a very good region for monetary union. In my view the idea that there will be monetary union at some point in the future is assured,' he told delegates.-TradeArabia News Service