that should have ensured there were proper risk management and control systems within each bank. it was the board of directors that should have ensured that the senior management of the bank had properly taken into account the possibility of experiencing extreme stress scenarios. finally, it was the board of directors that should have ensured the remuneration structures were in line with the long - run interest of the bank itself rather than rewarding short - term risk - taking. the need for high standards of corporate governance is, therefore, one of the main lessons to be drawn from the global financial crisis. it is in this context that the cbb views the new code as a significant development in strengthening bahrain ’ s reputation as a well regulated financial centre. the new code builds on current international best practice for corporate governance. for example, it reflects the corporate governance principles developed by the organisation for economic cooperation and development which have become the benchmark for international standards in the field. of course, the special responsibilities of the board of directors of a financial institution which i mentioned earlier means that the cbb will need to continue to apply its own corporate governance requirements on such matters as internal high level controls, the avoidance of conflicts of interest, and various public disclosure and reporting requirements. these will need to remain more detailed than those in the new code, for example setting the public disclosure requirements for financial institutions. the cbb ’ s detailed requirements on corporate governance will therefore continue to exist in parallel to the new code. it is important that public companies in bahrain, both financial and non - financial, enter fully into the spirit of the new code. it should not be seen as a matter of complying with just another set of regulations, but as something that should influence the corporate culture of companies in bahrain. greater transparency and more effective governance structures will in the long - run only serve to increase the attractiveness of bahrain for foreign investors seeking to establish or expand operations in the mena region. in conclusion i would like to take this opportunity to thanks dr. hassan fakhro, minister of industry and commerce, for his support and cooperation in the introduction of the new corporate governance code, and to the steering committee for the excellent work it has achieved. thank you for your attention.

advocated. in other words, there is need for developing countries to choose or prioritise alternative forms of capital flow on the basis of costs and benefits. in choosing the alternative forms, the costs and benefits of a variety of instruments by which each of the forms of flows can be influenced should also be assessed. the need for prudent limits on short - term debt is universally acknowledged in the current debate. the treatment of individual components of the capital account and the pace of liberalisation need to vary. briefly restated, the components of the capital account needs to be managed by each country taking into account country specific characteristics. it is also clear that while several initiatives are proposed at the global level, the task of preventing a crisis is essentially a national responsibility though an enabling international environment is sought to be put in place to facilitate action by individual countries. no doubt, in today ’ s globalised world, prevention of crises as well as mitigating the effects require multilateral efforts, but the social consequences of such crises are to be met by the national governments concerned. in this sense, the ultimate responsibility in regard to crisis prevention and management rests primarily on the policy makers of the countries concerned. the policy makers in developing countries, therefore, have to manage their capital accounts to ensure an orderly process of liberalisation. in this context, management of the capital account involves management of control, regulation and liberalisation. gradualism in liberalisation implies that the mix between controlled, regulated and liberalised capital transactions keeps changing gradually in favour of the latter. in fact, if the option of re - imposing controls to meet an emergency is contemplated, the management of capital account should always contain control, regulatory and liberalisation options. in india, capital account liberalisation is treated as a process. the medium - term objective is orderly liberalisation, while the short - run challenges are met by flexible use of the control and regulatory framework in other words, there may be occasions when the pace of liberalisation needs to be temporarily slowed down or halted, though in some rare cases the process has to be reversed, albeit for a short period. context industrial and developing countries do have a common interest in encouraging larger but less volatile global flows. since the policy - making in developing countries involves gradual liberalisation, the pace and sequencing would also depend on the international context as appropriate to the country. among the relevant international factors are the following. firstly, the state of global arrangements for prevention of crises. secondly, the extent, nature