the various Arab-European joint ventures in the banking sector. Another path to explore was offering a wider range of medium and long-term investments, especially in countries with stable currencies such as the United States and Switzerland. In this regard, Eurab could rely on another EBIC subsidiary, Euram, as well as the European Banking Company (EBC) in London, and Crédit Suisse. The committee further considered establishing Eurab subsidiaries in Zurich, London and New York.

Despite the issues surrounding EBIC member Midland Bank, Eurab directors came to see the opening of a subsidiary in London as a priority. Arab shareholders were especially keen, as they saw this as an essential complement to the existing continental network. In 1975, Eurab s capital was therefore increased with a view to establishing a UK subsidiary. The proposal was authorised by the Bank of England on the occasion of Dr. Kaissouni s visit to London, and the European Arab Bank Ltd (London) was established in 1976 with capital of US$16.3 million. The founders wanted to make it an institution specialising in financial engineering, particularly loans and bond issues for Arab borrowers and portfolio management services for Arab investors. Getting the bank up and running proved hard work, with its working capital swallowed up by the cost of recruiting a team of specialists in international finance and portfolio management, businesses that take time to develop. Eurab London threw itself from the beginning into credit transactions in Eurobonds, a business similar to that pursued by Eurab Brussels, and thus quickly found itself in competition and sometimes in conflict with the other bank.

From 1975, EBIC also looked at setting up a Eurab offshore subsidiary in the Gulf itself. It first considered Abu Dhabi, but in the end it was Bahrain where a representative office was opened in 1976, as a branch of the London subsidiary. The expectation was that authorisation to set up an offshore bank would be granted quickly.

Eurab Brussels continued to grow, thanks to a management team who were partly seconded from Société Générale de Banque and had brought its basic principles along with them, while London continued to be dogged by management problems. Despite the fact that London had set up Eurab Middle East in Bahrain, where it grew quickly due to the favourable tax regime, Brussels became the cornerstone of the group. This happened in spite of the efforts of the directors in London to try to transform London into the Eurab group head office and reduce Brussels role to that of a branch.

In July 1978, a substantial improvement was made in the way Eurab worked with the implementation of a new management team called the Central Unit. A group of four board directors, two European and two Arab, were made responsible for management, a much more efficient approach than involving the full 25-seat board as had been the case until then. The Central Unit was tasked with co-ordinating the activities of the various affiliated banks while leaving them sufficient room to develop their own initiatives.

One of the most delicate aspects of the relations between European and Arab shareholders was the question of country limits. Since its establishment in 1972, Eurab had been

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