The CBB supervises its licensees in accordance with relevant international standards. For banks, insurance service providers, and investment business service providers, this means that CBB requirements address the Core Principles and other standards of the Basel Committee, the International Association of Insurance Supervisors and the International Organisation of Securities Commissions. Bahrain was last assessed against these standards by the IMF in 2005-06, as part of a Financial Sector Assessment Programme review: a copy of their overall assessment is provided under 'Related Information'.
CBB requirements are risk focused and principles-based, as well as tailored to different categories of licensee and the variable nature of supervisory risks that they pose. CBB requirements cover both prudential standards as well as conduct of business.
In terms of capital requirements, all banks are currently required to apply a 12% minimum Capital Adequacy Ratio calculated in accordance with the Basel II requirements. These regulations are currently being revised in order to meet the Basel III requirements which are palnned to be implemented in phases from 2013 onwards.
Insurance companies are subject to solvency margin requirements (similar to existing EU requirements), and investment firms are subject to risk-based capital requirements that include position, counterparty and foreign exchange risk, as well as an expenditure requirement.
The CBB's requirements are contained in the CBB Rulebook, which is structured into different Volumes, each addressing a particular category of licensee or area of activity:
Volume 1: banks (conventional)
Volume 2: banks (Islamic)
Volume 3: insurance
Volume 4: investment business
Volume 5: specialised licensees (under development)
Volume 6: capital markets (under development)
Volume 7: Collective investment undertaking
For those Volumes still under development, licensees are subject to individual stand-alone regulations. Full details of these, together with the CBB Rulebook, are available in the Laws & Regulations section of this website.