Trust in Bahrain

Author: | Published: 1 Aug 2007

Bahrain is not what many expect in a Middle East state. A liberal, democratic island, Bahrain won independence from Britain in 1971. It quickly became the banking centre for the region, helped by its modern institutions and proximity to Saudi Arabia's oil-rich east coast. In recent years it has forged ahead as a financial centre, becoming a hub for Islamic finance and setting up a free trade agreement with the US in 2006 – the first between the US and a Gulf state.

Key to its development has been one particular modern institution – the Central Bank. Set up by the Bank of England, it has driven reform for years and is generally credited with maintaining Bahrain's position as the traditional finance hub for the region.

One of the bank's recent reforms was its introduction of a law to govern trustees and trust administration in August 2006. This was an unusual move,...