The Central Bank of Bahrain is planning to identify several banks it views as key to the health of its financial system and set tougher regulatory requirements for them to ensure they can survive future financial crisis.

Governor of the Central Bank of Bahrain, Rasheed al-Maraj, said that it will soon name the “locally incorporated banks” it has identified and start communicating with them the additional capital requirements.

“Over the last year we have done an examination to identify which domestic institutions are the most important to the financial sector, and we are on the verge of communicating that,” said Al-Maraj at the Euromoney Bahrain conference on 5 March.

The aim of this process, along with other new global banking regulations, is to “create a banking system better equipped to cope with future crises”, the governor added.

As part of trying to strengthen the local banking system, the central bank said it was also continuing to encourage smaller lenders to merge and create institutions that “can do larger deals and better withstand global downturns”. Al-Maraj said that there was at least one more bank merger being planned.

In January, three small Bahraini banks, Capivest, Capital Management House, and Elaf Bank completed a three-way merger that created a bank with total assets of $400m.