Riyadh, Asharq Al-Awsat—Gulf Cooperation Council (GCC) member states are considering the launch of a mechanism to share credit referencing information between their respective credit bureaus.

The idea will be discussed during the 67th GCC Banking Supervision Committee meeting due to take place on Tuesday in Riyadh, Saudi Arabia.

The meeting, which will host finance ministers and central bank governors from member states—which comprise Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—will also be attended by credit bureaus from participating countries.

A source with knowledge of the situation told Asharq Al-Awsat that the mechanism, a Bahraini idea, had been almost “unanimously welcomed” by member state’s credit bureaus.

“This idea must see the light of day,” said the source, who requested anonymity. “There is a real need for this kind of mechanism. It is something GCC residents and companies alike will be able to take advantage of in order to protect them from debtor default.”

The information exchange will allow companies and individuals from member states to assess the credit risk of potential borrowers across the region.

“The Central Bank of Bahrain (CBB) had already studied the idea, especially the legal and technical difficulties that the project could potentially face,” the source continued.

The source said that member state credit bureaus were now awaiting the agreement of their respective central banks for the mechanism to be fully launched.

The GCC meeting on Tuesday will also discuss the latest steps which members of the Council have taken to follow the Basel III accords on minimum capital and liquidity requirements for banks, as well as the latest developments in the financial regulatory environment in the GCC.

On October 5, the GCC hosted a meeting with the International Monetary Fund (IMF) attended by finance ministers and central bank governors from member states, and Deputy Managing Director of the IMF Nemat Shafik.

Speaking to the press after the meeting, Bahrain Finance Minister Ahmad Bin Mohammad Al Khalifa said that member states were taking “great strides in cooperating to establish joint financial markets,” and that they were now moving towards a fully-fledged economic union.

He said that the “cautious economic policies” followed by GCC member states had helped them to avoid many of the troubles afflicting other countries during the current global economic downturn.

Also to be discussed on Tuesday will be the upcoming ‘Regulation and Supervision of Systemically Important Banks’ seminar hosted in cooperation with the Bank for International Settlements’ Financial Stability Institute, due to take place in the Qatari capital Doha between March 4-6.

The IMF forecasts that growth in GCC countries is expected to pick up by 4.1 percent in 2014.