Middle East economies are unlikely to suffer from the global credit crisis to the same degree as the West because of ample regional liquidity.

That is the view expressed by Central Bank of Bahrain Governor Rasheed Al Maraj in an interview in the forthcoming 'The Report: Bahrain 2008,' the latest edition of the business guide to be published by Oxford Business Group.

He said that the question about whether regulators should have taken pre-emptive measures to mitigate the effects of the credit crunch had come up on many occasions.

'My position is that regulators cannot micro-manage the investment portfolios of banks,' he said.

'We are focused on making sure that licensed institutions adhere to regulations.

'If licensees take risks that are contrary to their prudential limits, that burden cannot be put on the regulator. It is the responsibility of the bank's management and board of directors. Each business must be managed and run according to the decisions made by institutions.'

'By the end of last year, affected institutions in Bahrain disclosed their exposure and they have taken measures to rectify the problem since,' he said.

'The wider implications of the credit crunch are more than likely to affect local banks, especially as a number of leading global institutions have been severely affected.

'However, unlike Western economies, economies in this region have ample liquidity at hand due to high oil prices so I feel we are not as likely to suffer from credit worries.'-TradeArabia News Service