News / Economy

Bahrain Financial Center Pays Price of Political Turmoil

Men stand in front of closed shops near Pearl Square in the center of Manama, Mar 15 2011
Men stand in front of closed shops near Pearl Square in the center of Manama, Mar 15 2011
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Several international bank branches remained shut for a second day on Thursday while a handful reopened on a limited basis. Bahrain's stock market also reopened.

But news agencies reported that some banks have sent their workers to Dubai to escape the unrest in Bahrain, home to a $66 billion Islamic finance industry. On Wednesday, security forces drove pro-democracy protesters out of the main square in the capital of Manama and then on Thursday arrested several opposition leaders. Gulf Air, Bahrain's national carrier, closed its ticket offices except for those at the airport serving the island nation and canceled all flights to Iran and Iraq. Flights to other destinations were still operating.

Vitol Group, the world's largest independent oil trader, also moved about a dozen of its workers to Dubai in the United Arab Emirates.

The Reuters news agency reported that some wealthy account holders have started to send their cash out of Bahrain - to other Mideast financial centers or to London and other European destinations - so they have more access to it.

Reuters quoted one banking source as saying that some of Bahrain's richest people had withdrawn 15-20 percent of their deposits and investments in the last few days.

In response to the turmoil, two major international financial services firms, Fitch Ratings and Standard & Poor's, have both downgraded the country's credit rating.

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