Functions of GCC Central Bank Essay Example | Topics and Well Written Essays - 3000 words

Functions of GCC Central Bank - Essay Example The novel set of commercial subtleties will bring significant demographic and economic changes within individual member countries. It is because of this that the merger seeks to inaugurate a fledging monetary union. The management and operational structure will have to accommodate the system of Islamic banking in its structure (Sturm Michael, 2005). The Central Bank of the Gulf Cooperation Council shares critical financial management essentials. The difference comes in the scope of autonomy, the depth of economic power of the member states and the unique geopolitical facts of the Gulf region. The comparison is made against the already established European Central Bank. Some of the objectives include the elimination of foreign exchange risks, expanding the nature of global financial bargaining power, stabilizing the currencies of the member unions and generally assuring the economic power of the nations involved. Challenges are bound to arise, including the fluctuation of the international oil prices that is the economic backbone of most Gulf States. There also are many wars and instability in the region and religious in-fighting even within Islam, the single dominant religion in the region. The Gulf Cooperation Council embraces the nations within the Arab Persian Gulf, leaving out Iraq. The member states include Kuwait, Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The suggestion to establish the confederation was inspired by Saudi Arabia. It then was initiated in Abu Dhabi on May 25th 1981 after which it was legitimately actualized on November 11th 1981 in Abu Dhabi. The members saw it necessary to form a mutual currency and establish a Common Bank. The hint of the Gulf Central bank was agreed on 5th of May 2009 at the advice-giving gathering held in Riyadh. It was unanimously agreed that Riyadh, Saudi Arabia would play host to the fresh bank. The proposed bank has however never materialized. Autonomous