Regulatory systems need an increasing degree of cross-border cooperation to effectively supervise both the managerial quality and the probity of individuals involved in the management of these institutions, according to Sheikh Ahmed bin Mohammed Al Khalifa, Governor of the Bahrain Monetary Agency.

"Financial markets are inherently unstable and the history of economic development is littered with examples of that instability. Following the Asian crisis we now know that the phenomenon described as globalisation has introduced another adverse factor into the equation, that of contagion.

"It is the ability of latter-day financial crises to break out from their original source and thus endanger other economies that is their most alarming feature. The world of corporate management is subject to these same pressures and the regulator must respond to this enlarged scenario," said Sheikh Ahmed, while opening a regional workshop for the GCC Committee of Banking Supervisors.