Global Banking Corporation B.S.C (GBCorp), the Bahrain-based Islamic Investment Bank, was honored on Monday with the award for Business Innovation by the British Chamber of Commerce in the presence of Lord Peter Mandelson, Secretary of State for UK Business, Enterprise and Regulatory Reform and European Union Commissioner for External Trade. Mark Hanson, chief executive, GBCorp, received the award at a glittering award ceremony held as part of the concluding ceremony of the GCC EURO Expo in London. The Duke of Gloucester expressed appreciation at GBCorp's efforts in building strategic relationships between the GCC countries and the UK and Europe as a whole. “Since its inception, GBCorp has advocated and adopted a pragmatic policy that encourages innovation, leveraging on its regional experience and expertise to establish a strong presence at the global level and actively facilitating global investment opportunities through building partnerships for mutual development. Innovation combined with a prudent approach is at the heart of GBCorp's business strategy and our presence here today, as part of the GCC Euro Expo is another step in developing such partnerships,” said Hanson. Healso participated in the GCC EURO EXPO panel discussion on Banking and Islamic Finance, taking an analytical measure of the present economic crisis and whether Islamic Banking had better answers to avert the current global financial meltdown. “The present economic crisis has certainly brought into focus all aspects of financial supervision. The stereotype perception is that risk management and supervisory practices have lagged behind financial innovations and emerging new business models. The present crisis underscores the need for regulation staying ahead of the curve and for continually upgrading the skills and instruments for financial regulation and supervision. But it is also important to understand that in trying to stay ahead of innovation, regulation should not get so stringent that it stifles innovation,” he added. “The right lesson to draw is that markets and institutions do succumb occasionally to excesses which is why regulators have to be vigilant and constantly find the right balance between attenuating risk-taking and inhibiting growth,” he said. Islamic Banks' transactions are backed by real economic assets and risk management, benefiting from the application of and compliance with Shari'a principles and guidelines, wherein the banks and investors have to share the profit and losses in accordance with the risks taken. While in conventional finance, risk-free capital encouraged over-leveraging and over exposures by transferring transactions to off-balance sheets conduits. Hanson noted that in spite of fears that the global credit crunch and economic slowdown could impact the Arabian Gulf, analysis shows there are still more than 250 major civil construction projects in the bidding phase across the region worth nearly $120 billion. They range in value from $12 million to $13.6 billion with 135 of them in the United Arab Emirates and 60 in Saudi Arabia. The Top Ten projects in bidding alone are valued at a staggering total of $64.3 billion, headed by the building of new cities in both the UAE and Saudi Arabia. These statistics underline that there is still a lot of activity planned in civil construction in coming years. “Challenges also bring opportunities in their fold. And I believe this is the time for grabbing any and all such opportunities that come our way. For countries in the GCC region, opportunity is staring at them in the face - the opportunity to benefit from a coordinated effort to bring the GCC financial markets together. The formation of a single currency will bring several benefits to GCC member countries. It would lead to a reduction in foreign exchange transaction costs, remove exchange rate risks, promote pricing transparency, and increase competition. Consequently, it would foster trade, investment, and economic growth in the region,” said Hanson. He noted that the current global crisis had drawn positive attention to the fundamentals of Islamic banking and was sure to generate greater awareness as well as help the Islamic banking industry gain global acceptance. “Islamic banking and finance industry has crossed regional boundaries and has come to be accepted on the global stage, due to the demand for an alternative to conventional banking products. Islamic banking might not have all the answers to such a crisis but it is certainly better positioned and can work in conjunction with conventional banking to build strong regulatory bridges.” The GCC Euro Expo, seminars and panel discussions were attended by a number of highly placed government officials, key figures from the investment banking, regulatory and trading arena from across the GCC and Europe as well as industry specialists from Europe and across the GCC region. __
