A key objective of the Central Bank of Bahrain (CBB) is to ensure the continued soundness and stability of financial institutions and markets.
The CBB defines financial stability as a situation where there is continuous and prudent provision of financial services, even in the face of adverse shocks. It believes that financial stability is critical for maintaining Bahrain's position as an international financial center and for ensuring that the sector continues to contribute significantly to growth, employment and development in Bahrain.
The pursuit of this objective is the primary responsibility of CBB's Financial Stability Directorate (FSD), which conducts regular surveillance of the financial system to identify areas of concern and undertakes research and analysis on issues relating to financial stability.
The Directorate prepares Financial Stability Reports (FSRs) for CBB management, reviewing recent trends and identifying areas of concern which require supervisory and policy attention. The FSD has developed relevant Financial Soundness Indicators to monitor the financial sector on a continuous basis.