The document discusses lessons that Islamic finance can learn from regulatory reforms implemented in response to the global financial crisis. It addresses four key dimensions of improved regulation for Islamic finance: 1) effective implementation of international standards, 2) incorporating macroprudential oversight, 3) developing financial safety nets and resolution regimes, and 4) enhancing cross-border supervisory cooperation. Global regulatory cooperation can help Islamic finance strengthen financial stability while accommodating its unique characteristics and risks.
The document discusses several key international institutions in Islamic finance:
1. The International Islamic Financial Market (IIFM) works to standardize Islamic capital and money market products and documentation.
2. The International Islamic Liquidity Management Corporation (IILM) aims to enhance cross-border investment flows and financial stability in Islamic finance. It is headquartered in Kuala Lumpur and governed by several central banks.
3. Other organizations mentioned include the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) which issues standards and guidelines for the industry.
MALAYSIA INTERNATIONAL ISLAMIC FINANCIAL CENTRENATASHYA AYUNIE
The MIFC Executive Committee oversees the implementation of Malaysia's Islamic financial initiatives. Chaired by the Governor of Bank Negara Malaysia, the committee comprises officials from government agencies and regulators who work to promote Malaysia as a global Islamic finance center. The MIFC initiative was launched in 2006 and is supported by key Malaysian financial authorities and private sector partners to develop Islamic banking, takaful, sukuk issuance, and professional services in the country.
Islamic finance current, future trends and challengesHosam alden
This document summarizes the current state of Islamic finance, future opportunities, and challenges. It discusses how Islamic finance emerged in the 1960s and has grown significantly in recent decades, with over $200 billion in assets currently. The key principles of Islamic finance are outlined, including prohibitions on interest and risk/profit sharing. Common instruments like murabaha, ijara, mudaraba and musharaka are described. Norms around avoiding riba (interest), gharar (uncertainty), and encouraging mutual cooperation are also covered. The document concludes that while Islamic finance remains a niche market globally, prospects for growth are strong given demand from Muslims worldwide and opportunities to channel savings ethically. However, it also faces challenges from differences
Islamic finance has grown rapidly in recent decades and become a significant part of the global financial system, with estimated assets exceeding $1 trillion. There are two main models of Islamic finance - the Arab model which originated in the 1970s focused on asset management, while the Malaysian model emphasized generating financing. Malaysia in particular has been innovative in developing sharia-compliant financial instruments and a dual banking system. For Islamic finance to be economically sustainable, it must continue to interface productively with conventional finance by creating positive synergies rather than assuming competition between the systems.
INTERNATIONAL ISLAMIC FINANCIAL MARKET (IIFM) NATASHYA AYUNIE
IIFM is an international standards-setting body for the Islamic finance industry that focuses on standardizing Islamic financial contracts and products. It works to unify the market by developing best practices at the global level and harmonizing Shari'ah interpretations. IIFM has published several standards, including master agreements for treasury placement, hedging products, and collateralized murabahah agreements, to facilitate standardized documentation for liquidity management, risk management, and access to liquidity. IIFM standards aim to support a sustainable development of the Islamic finance industry globally.
This was the presentation made at Government Brennen College, Thalassery, Kerala, India; in the Seminar organized by the Islamic History Department on 27th October, 2014.
The document discusses several key international institutions in Islamic finance:
1. The International Islamic Financial Market (IIFM) works to standardize Islamic capital and money market products and documentation.
2. The International Islamic Liquidity Management Corporation (IILM) aims to enhance cross-border investment flows and financial stability in Islamic finance. It is headquartered in Kuala Lumpur and governed by several central banks.
3. Other organizations mentioned include the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) which issues standards and guidelines for the industry.
MALAYSIA INTERNATIONAL ISLAMIC FINANCIAL CENTRENATASHYA AYUNIE
The MIFC Executive Committee oversees the implementation of Malaysia's Islamic financial initiatives. Chaired by the Governor of Bank Negara Malaysia, the committee comprises officials from government agencies and regulators who work to promote Malaysia as a global Islamic finance center. The MIFC initiative was launched in 2006 and is supported by key Malaysian financial authorities and private sector partners to develop Islamic banking, takaful, sukuk issuance, and professional services in the country.
Islamic finance current, future trends and challengesHosam alden
This document summarizes the current state of Islamic finance, future opportunities, and challenges. It discusses how Islamic finance emerged in the 1960s and has grown significantly in recent decades, with over $200 billion in assets currently. The key principles of Islamic finance are outlined, including prohibitions on interest and risk/profit sharing. Common instruments like murabaha, ijara, mudaraba and musharaka are described. Norms around avoiding riba (interest), gharar (uncertainty), and encouraging mutual cooperation are also covered. The document concludes that while Islamic finance remains a niche market globally, prospects for growth are strong given demand from Muslims worldwide and opportunities to channel savings ethically. However, it also faces challenges from differences
Islamic finance has grown rapidly in recent decades and become a significant part of the global financial system, with estimated assets exceeding $1 trillion. There are two main models of Islamic finance - the Arab model which originated in the 1970s focused on asset management, while the Malaysian model emphasized generating financing. Malaysia in particular has been innovative in developing sharia-compliant financial instruments and a dual banking system. For Islamic finance to be economically sustainable, it must continue to interface productively with conventional finance by creating positive synergies rather than assuming competition between the systems.
INTERNATIONAL ISLAMIC FINANCIAL MARKET (IIFM) NATASHYA AYUNIE
IIFM is an international standards-setting body for the Islamic finance industry that focuses on standardizing Islamic financial contracts and products. It works to unify the market by developing best practices at the global level and harmonizing Shari'ah interpretations. IIFM has published several standards, including master agreements for treasury placement, hedging products, and collateralized murabahah agreements, to facilitate standardized documentation for liquidity management, risk management, and access to liquidity. IIFM standards aim to support a sustainable development of the Islamic finance industry globally.
This was the presentation made at Government Brennen College, Thalassery, Kerala, India; in the Seminar organized by the Islamic History Department on 27th October, 2014.
The document provides an overview of the Islamic Development Bank (IDB), including its vision, objectives, capital structure, membership, organizational structure, programs, sources of funds, and modes of finance. The IDB is an international development bank established in 1975 by OIC member states. It aims to promote socio-economic development in Muslim communities through various development programs and by providing financing through Sharia-compliant structures like leasing, installment sales, and istisna'a contracts. The IDB has expanded over time and now operates as a group consisting of five entities focused on development banking, research, private sector development, trade finance, and political risk insurance.
The document discusses major challenges facing Islamic banking and finance, including building capacity and awareness, developing proper legal and regulatory frameworks, addressing issues from globalization, establishing accounting and auditing standards, and ensuring compliance with Islamic principles prohibiting interest, speculative risk, and sinful activities. It emphasizes the need to build talent and expertise through education and training to strengthen the foundations and allow further growth of the industry.
The global Islamic finance industry has grown rapidly over the past decade and now manages over $1 trillion in assets. Several factors are driving continued growth, including increased capital from Muslim-majority countries, the rise of Islamic multinationals, and growing retail demand. While the industry has potential to tap into the large Muslim population worldwide, it still needs to educate customers and differentiate itself more from conventional finance. Regulatory challenges and a lack of skilled professionals could hamper further expansion.
The Islamic finance industry has grown significantly in recent decades. It is currently estimated to be worth around $700 billion but is expected to reach $1.4 trillion by 2010. Islamic finance first developed in the 1960s and gained momentum in the 1970s due to oil wealth. It faced early criticisms for not having interest rates but responded that returns are determined after investment based on actual profits. The industry continued growing through the 1980s and 1990s as more institutions offered Islamic products. It was impacted by the 2008 financial crisis but overall fared better than conventional finance due to its risk-sharing principles. Looking ahead, forecasts show continued strong growth in Islamic finance as interest grows in both Muslim-majority and Western countries.
Working Paper Insights from the South African ExperienceDr Lendy Spires
This document summarizes a study examining the linkages between financial inclusion and the other core objectives of financial stability, integrity, and consumer protection (referred to as I-SIP objectives) based on examples from South Africa. The study analyzes specific policies and regulations implemented in South Africa to understand how they considered and addressed potential risks and benefits across the I-SIP objectives. Based on these examples, the study proposes a methodology for policymakers to optimize I-SIP linkages by applying a principle of proportionality when designing financial inclusion policies and regulations. The methodology is summarized in seven guidance statements focused on inter-agency collaboration, assessing linkages, defining objectives, segmenting markets, collecting data, consulting stakeholders, and adapting over time based
Structuring Alternative Investment in Public Private Partnership Projects Using Islamic Financial Instruments
https://uijrt.com/articles/v1i5/UIJRTV1I50002.pdf
Mauritius faces challenges and opportunities in developing its financial sector. Key points include:
1) Mauritius signed a tax agreement with India that will share taxation on capital gains from 2017-2019 and India offered Rs12.7 billion to help Mauritius grow its financial sector.
2) Mauritius' financial sector currently lacks substance and expertise in profitable activities. A major transformation is needed but will be long and difficult.
3) Two major banks, MCB and SBM, dominate the banking system but are well capitalized. They pose systemic risks to Mauritius' financial system that regulators need to address.
The document provides information about the Islamic Development Bank (IDB). It details that the IDB was established in 1974 in Jeddah, Saudi Arabia by 57 member countries to promote social and economic development in Muslim communities. The IDB aims to alleviate poverty and promote human development, science/technology, Islamic economics and cooperation among member countries. It has a Board of Governors as its highest authority and a Board of Executive Directors that directs operations. The IDB is funded through sources like the Islamic Solidarity Fund for Development and its Waqf Fund.
Trust Fund: A Product Combining Waqf, Zakah and Sadaqah for Socio-Economic A...Islamic_Finance
This paper introduces Waqf, Zakah and Sadaqah, which are currently being mobilised by the non-Financial Institutions (non-FIs) such as charitable organisations and Non-Governmental Organisations (NGOs) as additional components of Islamic finance industry, to complement the efforts of financial intermediaries as a contributor to key socio-economic development. The paper presents various aspects of a case study regarding the use of Trust Fund Instrument by the Islamic Development Bank (IDB) for socio-economic development in its member countries including a project run with the co-operation of Bill & Melinda Gates Foundation (Gates Foundation) for polio eradication in Pakistan as part of the Global Polio Eradication Initiative (GPEI).
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTSbrighteyes
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTS 13 June 2006
Victoria University of Wellington
Presented by:
Bakarudin Ishak
Director
Islamic Banking and Takaful Department Bank Negara Malaysia
1) Pakistan was one of the first countries to implement Islamic banking in the 1960s and 1970s, with the founder of Pakistan calling for an Islamic banking system when establishing the State Bank of Pakistan in 1948.
2) Egypt started the first modern Islamic bank, called Mit Ghamr Savings Bank, in 1963 based on profit-sharing principles without interest. It succeeded in attracting many depositors and financing local projects until being shut down for political reasons in 1967.
3) Malaysia established Tabung Haji in 1962 as the first Islamic bank in Asia to help Muslims save for the hajj pilgrimage, and it remains an important Islamic financial institution today.
This document provides an overview of the framework of the Islamic financial system. It discusses key concepts like Islam, Islamic economics, banking and finance. The core principles of Islamic banking are outlined, including a prohibition of riba (usury) and risk sharing. The objectives of Islamic banking are described as promoting products and services based on shariah principles, upholding brotherhood and providing facilities to communities. Ethics like avoiding abuse of power and maintaining secrecy are also emphasized. Sources of Islamic law that guide the system are mentioned.
The document outlines an Islamic finance workshop held in Dakar, Senegal in November 2013. It discusses the origin and principles of Islamic finance, which are based on ethical values of preserving faith, life, intellect, wealth and posterity for all. Islamic finance prohibits interest (riba) and involves profit/loss sharing and mark-up for trade financing. The outline discusses the growth of the global Islamic finance industry, including segments like Islamic banking, sukuk bonds, funds and microfinance. It notes the industry has grown to over $1 trillion in assets, with the majority in banking and located in the Middle East and Southeast Asia, though Africa is an emerging market.
The document provides an overview of a presentation on recent issues in Islamic finance and the modern economy. The presentation covers the main principles of Islamic finance including a ban on interest (riba), promotion of fairness and equity, profit and loss sharing, and the zakat mechanism. It also discusses the differences between Islamic finance and conventional finance which allows interest, as well as governance, growth, human capital development issues, and La Trobe University's role in and plans for its new Master of Islamic Banking and Finance program.
islamic banking Financial Markets and InstitutionsAdvaldo CM
This document provides an overview of Islamic banking. It discusses the foundations and rules of Islamic banking, which are based on prohibitions against riba (interest), gharar (uncertainty), and maysir (gambling). Permissible activities must be halal and financial institutions must collect zakat. Common Islamic financial contracts include mudaraba, musharaka, and murabaha. The document also provides a brief history of the first Islamic bank in Turkey, Albaraka Turk.
ISLAMIC ACCOUNTING PRACTICES - THE IMPORTANCE OF ISLAMIC CAPITAL MARKET IN MA...Nur Adillah Arifah Nazri
Capital markets are an important component of the financial system for raising funds for long-term investment. They provide opportunities for diversification of risk through cross-sectional risk sharing. The long-term investments are facilitated through a series of short-term contracts in the form of tradable securities enabling the investors an opportunity to exit or enter through trade. Thus they provide an element of liquidity to the otherwise illiquid assets. The secondary market also provides pricing and valuation of assets on a continued basis thus eliminating arbitrage and inefficiencies
This document summarizes a study on how the global financial crisis has impacted Bosnia and Herzegovina's financial stability and whether Islamic banking principles could help. The study used interviews and secondary data analysis to address 5 research questions. Results found that Bosnia's dependence on foreign banks, rising unemployment, and debt leave it vulnerable. The study concludes that incorporating aspects of Islamic banking like profit/loss sharing and linking finance to real economic activity could help reduce risk and stabilize Bosnia's financial system over time. More research is still needed to fully evaluate the impacts of applying Islamic financial principles in Bosnia.
[Full Report] Barriers and Opportunities at the Base of the Pyramid - The Rol...Dragoș Tuță
As part of its mandate to guide and define the role of the private sector in poverty reduction and inclusive development, the UNDP Istanbul International Center for Private Sector in Development (IICPSD) produced the “Barriers and Opportunities at the Base of the Pyramid” foundational report. Developed by an interdisciplinary team of 18 leading poverty experts, the report leverages an ecological approach to understanding barriers to poverty reduction. The report presents poverty as a complex web of accumulating and interacting disadvantages facing people living in poverty, which in turn, sustain and perpetuate a life of socioeconomic exclusion. The barriers are clustered into five broad categories: Early Developmental Barriers, Health Barriers, Skill Barriers, Social Barriers, and Decision-making Barriers.
Basel III is a global regulatory standard that aims to strengthen bank capital requirements and introduce new regulatory requirements on bank liquidity and leverage. It seeks to improve bank capital standards, stress testing, and market liquidity risk. The goals are to minimize the probability of bank failures, ensure banks can absorb shocks from financial and economic stress, and improve risk management. Basel III introduces reforms to bank capital adequacy, stress testing, market liquidity risk, and implements additional capital buffers and leverage ratios. It aims to strengthen the banking sector's ability to absorb losses during periods of financial and economic stress.
Program administrators need comprehensive training. The Georgia 40-Hour Director's Training credential provides an excellent overview.
http://altheapenn.tripod.com/id20.html
The document provides an overview of the Islamic Development Bank (IDB), including its vision, objectives, capital structure, membership, organizational structure, programs, sources of funds, and modes of finance. The IDB is an international development bank established in 1975 by OIC member states. It aims to promote socio-economic development in Muslim communities through various development programs and by providing financing through Sharia-compliant structures like leasing, installment sales, and istisna'a contracts. The IDB has expanded over time and now operates as a group consisting of five entities focused on development banking, research, private sector development, trade finance, and political risk insurance.
The document discusses major challenges facing Islamic banking and finance, including building capacity and awareness, developing proper legal and regulatory frameworks, addressing issues from globalization, establishing accounting and auditing standards, and ensuring compliance with Islamic principles prohibiting interest, speculative risk, and sinful activities. It emphasizes the need to build talent and expertise through education and training to strengthen the foundations and allow further growth of the industry.
The global Islamic finance industry has grown rapidly over the past decade and now manages over $1 trillion in assets. Several factors are driving continued growth, including increased capital from Muslim-majority countries, the rise of Islamic multinationals, and growing retail demand. While the industry has potential to tap into the large Muslim population worldwide, it still needs to educate customers and differentiate itself more from conventional finance. Regulatory challenges and a lack of skilled professionals could hamper further expansion.
The Islamic finance industry has grown significantly in recent decades. It is currently estimated to be worth around $700 billion but is expected to reach $1.4 trillion by 2010. Islamic finance first developed in the 1960s and gained momentum in the 1970s due to oil wealth. It faced early criticisms for not having interest rates but responded that returns are determined after investment based on actual profits. The industry continued growing through the 1980s and 1990s as more institutions offered Islamic products. It was impacted by the 2008 financial crisis but overall fared better than conventional finance due to its risk-sharing principles. Looking ahead, forecasts show continued strong growth in Islamic finance as interest grows in both Muslim-majority and Western countries.
Working Paper Insights from the South African ExperienceDr Lendy Spires
This document summarizes a study examining the linkages between financial inclusion and the other core objectives of financial stability, integrity, and consumer protection (referred to as I-SIP objectives) based on examples from South Africa. The study analyzes specific policies and regulations implemented in South Africa to understand how they considered and addressed potential risks and benefits across the I-SIP objectives. Based on these examples, the study proposes a methodology for policymakers to optimize I-SIP linkages by applying a principle of proportionality when designing financial inclusion policies and regulations. The methodology is summarized in seven guidance statements focused on inter-agency collaboration, assessing linkages, defining objectives, segmenting markets, collecting data, consulting stakeholders, and adapting over time based
Structuring Alternative Investment in Public Private Partnership Projects Using Islamic Financial Instruments
https://uijrt.com/articles/v1i5/UIJRTV1I50002.pdf
Mauritius faces challenges and opportunities in developing its financial sector. Key points include:
1) Mauritius signed a tax agreement with India that will share taxation on capital gains from 2017-2019 and India offered Rs12.7 billion to help Mauritius grow its financial sector.
2) Mauritius' financial sector currently lacks substance and expertise in profitable activities. A major transformation is needed but will be long and difficult.
3) Two major banks, MCB and SBM, dominate the banking system but are well capitalized. They pose systemic risks to Mauritius' financial system that regulators need to address.
The document provides information about the Islamic Development Bank (IDB). It details that the IDB was established in 1974 in Jeddah, Saudi Arabia by 57 member countries to promote social and economic development in Muslim communities. The IDB aims to alleviate poverty and promote human development, science/technology, Islamic economics and cooperation among member countries. It has a Board of Governors as its highest authority and a Board of Executive Directors that directs operations. The IDB is funded through sources like the Islamic Solidarity Fund for Development and its Waqf Fund.
Trust Fund: A Product Combining Waqf, Zakah and Sadaqah for Socio-Economic A...Islamic_Finance
This paper introduces Waqf, Zakah and Sadaqah, which are currently being mobilised by the non-Financial Institutions (non-FIs) such as charitable organisations and Non-Governmental Organisations (NGOs) as additional components of Islamic finance industry, to complement the efforts of financial intermediaries as a contributor to key socio-economic development. The paper presents various aspects of a case study regarding the use of Trust Fund Instrument by the Islamic Development Bank (IDB) for socio-economic development in its member countries including a project run with the co-operation of Bill & Melinda Gates Foundation (Gates Foundation) for polio eradication in Pakistan as part of the Global Polio Eradication Initiative (GPEI).
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTSbrighteyes
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTS 13 June 2006
Victoria University of Wellington
Presented by:
Bakarudin Ishak
Director
Islamic Banking and Takaful Department Bank Negara Malaysia
1) Pakistan was one of the first countries to implement Islamic banking in the 1960s and 1970s, with the founder of Pakistan calling for an Islamic banking system when establishing the State Bank of Pakistan in 1948.
2) Egypt started the first modern Islamic bank, called Mit Ghamr Savings Bank, in 1963 based on profit-sharing principles without interest. It succeeded in attracting many depositors and financing local projects until being shut down for political reasons in 1967.
3) Malaysia established Tabung Haji in 1962 as the first Islamic bank in Asia to help Muslims save for the hajj pilgrimage, and it remains an important Islamic financial institution today.
This document provides an overview of the framework of the Islamic financial system. It discusses key concepts like Islam, Islamic economics, banking and finance. The core principles of Islamic banking are outlined, including a prohibition of riba (usury) and risk sharing. The objectives of Islamic banking are described as promoting products and services based on shariah principles, upholding brotherhood and providing facilities to communities. Ethics like avoiding abuse of power and maintaining secrecy are also emphasized. Sources of Islamic law that guide the system are mentioned.
The document outlines an Islamic finance workshop held in Dakar, Senegal in November 2013. It discusses the origin and principles of Islamic finance, which are based on ethical values of preserving faith, life, intellect, wealth and posterity for all. Islamic finance prohibits interest (riba) and involves profit/loss sharing and mark-up for trade financing. The outline discusses the growth of the global Islamic finance industry, including segments like Islamic banking, sukuk bonds, funds and microfinance. It notes the industry has grown to over $1 trillion in assets, with the majority in banking and located in the Middle East and Southeast Asia, though Africa is an emerging market.
The document provides an overview of a presentation on recent issues in Islamic finance and the modern economy. The presentation covers the main principles of Islamic finance including a ban on interest (riba), promotion of fairness and equity, profit and loss sharing, and the zakat mechanism. It also discusses the differences between Islamic finance and conventional finance which allows interest, as well as governance, growth, human capital development issues, and La Trobe University's role in and plans for its new Master of Islamic Banking and Finance program.
islamic banking Financial Markets and InstitutionsAdvaldo CM
This document provides an overview of Islamic banking. It discusses the foundations and rules of Islamic banking, which are based on prohibitions against riba (interest), gharar (uncertainty), and maysir (gambling). Permissible activities must be halal and financial institutions must collect zakat. Common Islamic financial contracts include mudaraba, musharaka, and murabaha. The document also provides a brief history of the first Islamic bank in Turkey, Albaraka Turk.
ISLAMIC ACCOUNTING PRACTICES - THE IMPORTANCE OF ISLAMIC CAPITAL MARKET IN MA...Nur Adillah Arifah Nazri
Capital markets are an important component of the financial system for raising funds for long-term investment. They provide opportunities for diversification of risk through cross-sectional risk sharing. The long-term investments are facilitated through a series of short-term contracts in the form of tradable securities enabling the investors an opportunity to exit or enter through trade. Thus they provide an element of liquidity to the otherwise illiquid assets. The secondary market also provides pricing and valuation of assets on a continued basis thus eliminating arbitrage and inefficiencies
This document summarizes a study on how the global financial crisis has impacted Bosnia and Herzegovina's financial stability and whether Islamic banking principles could help. The study used interviews and secondary data analysis to address 5 research questions. Results found that Bosnia's dependence on foreign banks, rising unemployment, and debt leave it vulnerable. The study concludes that incorporating aspects of Islamic banking like profit/loss sharing and linking finance to real economic activity could help reduce risk and stabilize Bosnia's financial system over time. More research is still needed to fully evaluate the impacts of applying Islamic financial principles in Bosnia.
[Full Report] Barriers and Opportunities at the Base of the Pyramid - The Rol...Dragoș Tuță
As part of its mandate to guide and define the role of the private sector in poverty reduction and inclusive development, the UNDP Istanbul International Center for Private Sector in Development (IICPSD) produced the “Barriers and Opportunities at the Base of the Pyramid” foundational report. Developed by an interdisciplinary team of 18 leading poverty experts, the report leverages an ecological approach to understanding barriers to poverty reduction. The report presents poverty as a complex web of accumulating and interacting disadvantages facing people living in poverty, which in turn, sustain and perpetuate a life of socioeconomic exclusion. The barriers are clustered into five broad categories: Early Developmental Barriers, Health Barriers, Skill Barriers, Social Barriers, and Decision-making Barriers.
Basel III is a global regulatory standard that aims to strengthen bank capital requirements and introduce new regulatory requirements on bank liquidity and leverage. It seeks to improve bank capital standards, stress testing, and market liquidity risk. The goals are to minimize the probability of bank failures, ensure banks can absorb shocks from financial and economic stress, and improve risk management. Basel III introduces reforms to bank capital adequacy, stress testing, market liquidity risk, and implements additional capital buffers and leverage ratios. It aims to strengthen the banking sector's ability to absorb losses during periods of financial and economic stress.
Program administrators need comprehensive training. The Georgia 40-Hour Director's Training credential provides an excellent overview.
http://altheapenn.tripod.com/id20.html
The document outlines the eight Millennium Development Goals agreed upon by all United Nations member states and major development organizations. The goals aim to reduce extreme poverty, hunger, disease, and gender inequality while promoting education, environmental sustainability, and global partnerships by the target date of 2015. Each goal contains specific targets to measure progress made on that issue, such as halving the proportion of people living on less than $1.25 per day and the under-five mortality rate. The full achievement of these ambitious but feasible targets would significantly improve life for billions of people.
The document discusses secondary education in India's five year plans from 1951 to 2017. Key points include:
- Early plans focused on making secondary education relevant to adolescents' needs and the economy through vocational training.
- Later plans aimed to expand access through new schools, upgrade existing schools, strengthen science/math education, and introduce vocational courses.
- Recent plans seek to achieve universal secondary education, address quality and skills training, implement common curricula, and reduce gender/social gaps.
- Enrollment in secondary schools grew from 1.27 million students in 1950-51 to over 17 million students in 1998-99 according to plan period data.
Accenture 2015 Global Structural Reform Studyaccenture
Accenture’s 2015 Global Structural Reform Study – based on a survey of 131 banking, insurance and capital markets institutions across regions – confirms that, while institutions are investing in their response to Global Structural Reform (GSR), their plans still appear focused on meeting regulatory demands alone, rather than accounting for the more strategic implications of structural reform.
Highlights from the study's conclusions include:
- GSR is re-writing the financial services landscape
- Investment is clear, but strategy less so
- Three suggested principles for unlocking the potential of GSR
Download the report and visit https://www.accenture.com/accenture-2015-global-structural-reform-study.aspx to learn more.
Structure of taxation and classification of taxesshaik moin
Tax is a compulsory payment to the government and can be direct or indirect. Direct taxes have an immediate burden on the taxpayer, like income and wealth taxes. Indirect taxes are collected by intermediaries and included in the price, like sales tax. Governments in India levy various direct and indirect taxes. The central government levies income, wealth, customs, excise and service taxes. State governments levy professional, entertainment, VAT and state excise duties. Local governments levy property, water and sewerage taxes. Direct taxes are more equitable but also more complex and unpopular. Indirect taxes are more convenient but also more inflationary and expensive to collect.
The Mudaliar Commission was appointed in 1952 to examine secondary education in India and provide recommendations. It was chaired by Dr. A. Lakshmanswami Mudaliar and included seven other members. The Commission studied the present state of secondary education and suggested measures to reorganize and improve it. Key recommendations included restructuring secondary education to span 7 years, introducing vocational education, making the curriculum more flexible and practical, improving teaching methods, emphasizing character education and co-curricular activities, reducing examinations, and improving teacher training and status.
The document appears to be a project report on reforms to the Indian financial system submitted by Rahul Jain. It includes sections on the executive summary, introduction, current structure of the financial system, what has changed in recent decades, the need and importance of the financial sector, banking and credit policy, and financial innovations. The report examines reforms to the Indian financial system over the past few decades and how the system has evolved.
The document discusses reforms to India's financial sector that began in the early 1990s. It covers banking sector reforms, monetary policy reforms, and reforms to financial markets and the foreign exchange market. The reforms aimed to create an efficient, competitive financial sector by reducing regulations, introducing market forces, and improving regulatory standards and oversight. They occurred in two phases, with the initial phase in the early 1990s focused on operational flexibility and the second phase strengthening the system.
The document provides information about taxation systems in several countries in Southern Asia, including Australia, India, Myanmar, Philippines, and Thailand. It discusses how each country collects taxes, common tax types like income tax, VAT, and property tax. It also outlines some key aspects of the tax history and rates in each country. The top priorities for how tax revenue is spent include education, infrastructure development, defense, internal affairs, and agriculture.
This document discusses inclusion of special education students in general education classrooms. It notes there are pros and cons to inclusion. Research shows disabled students do as well or better academically in inclusive classrooms and benefit socially from inclusion. Inclusion helps general education students become more accepting and offer academic support. However, not all students learn best in inclusive environments, as some need more individualized instruction. The document reviews federal laws supporting inclusion and landmark court cases. It provides strategies to promote successful inclusion and concludes that while inclusion has downsides, research shows benefits outweigh risks.
This document provides an overview of taxation in India. It defines taxation and its objectives, such as raising revenue. It describes different types of taxes like direct and indirect taxes. It outlines principles of a good tax system according to Adam Smith's canons of taxation. It also details India's individual income tax rates, exemptions, and deductions from taxable income. The document concludes that taxation helps increase economic activity and promote growth through mobilizing funds.
The document discusses India's taxation system and the proposed Goods and Services Tax (GST). It describes the key features of direct and indirect taxes such as income tax, sales tax, and VAT. It then explains the proposed GST system, which will combine multiple indirect taxes into a single tax applicable to both goods and services. The GST is proposed as a dual GST with both central and state-level components. The complex structure and need for coordination between levels of government poses administrative challenges but is aimed at improving compliance and growth.
This document discusses the general principles of taxation according to a lecture on income taxation. It defines taxation as the means by which a government raises income to fund its necessary expenses. The primary purpose of taxation is to provide funds to promote citizens' welfare and finance government activities. Other purposes include strengthening industries, protecting local industries, and reducing inequality. The principles discuss the theory that government needs revenue and has the right to tax citizens in return for protection. A sound tax system should be fiscally adequate, impose equal burdens based on ability to pay, and be administratively feasible. The document also outlines constitutional and inherent limitations on taxation powers.
The document appears to contain information about various Indian taxes including income tax, sales tax, wealth tax, and service tax. It provides definitions and key details about the different types of taxes such as the tax rates, applicable entities, exemptions, and controversies in certain areas. It also summarizes the objectives and issues with some of these taxes in India.
This document provides an overview of the Goods and Services Tax (GST) in India. It discusses the key features of GST, including that it will combine multiple taxes into a single tax on goods and services, provide full tax credits, and follow a multi-rate structure. The document also reviews the journey towards implementing GST in India and compares GST structures in other countries.
This document discusses inclusive education in India. It defines inclusive education as promoting the full development of all learners regardless of differences. It outlines India's policies and schemes to promote inclusive education since 1985. The principles of inclusive education include no discrimination, equal opportunities, and adapting schools to students' needs. Challenges include lack of understanding, adjustment issues, and feeling isolated for students, and a need for trained teachers, facilities, and funds. The document recommends strategies like cooperative learning, peer tutoring, and mainstreaming to improve inclusive education.
This presentation is just designed in public interest and also to make the term DEMONETIZATION lucid to understand. Dont forget to hit like button before you proceed to download. And stay tuned to my channel so that I can serve you better by providing you ppt on current topics............
IFRS and Aaoifi, Harmonisation or Convergence?Nik Hasyudeen
The document discusses the convergence of accounting standards between the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the International Accounting Standards Board (IASB). It notes that while AAOIFI has developed Shariah-compliant standards, working with IASB could help further integrate Islamic finance into global standards. The document also recommends that Malaysia establish a committee to facilitate the application of IFRS to Islamic finance and position the country as a leader in the field.
Ey center-in-islamic-finance-for-africa-newBenett Momory
The document discusses Islamic finance and its potential for growth in Africa. It provides an overview of Islamic finance principles and structures like Mudaraba and Murabaha. While initially based on profit/loss sharing models, Islamic finance has diversified with many new products. It has three sectors - banking, Takaful insurance, and capital markets. The document argues Islamic finance can help fund growth in Africa as the industry and many African economies are expanding. It identifies opportunities in banking, Sukuk bonds, asset management and Takaful. The Center for Islamic Finance in Africa aims to support clients and develop the industry on the continent.
The document discusses Islamic finance and its growth. It provides details about a conference held by the National Bureau of Asian Research on Islamic finance in Southeast Asia. It summarizes the opening and closing keynote addresses which discussed linking Asia and the Middle East through sukuk markets, building a financial architecture through research, and managing regulatory challenges. The document also provides background on Islamic financial principles and the opportunities it provides through interregional linkages and new investment opportunities.
The main purpose of this research is to study and highlight that central bank of Jordan (CBJ) plays an important role in economic development. The objective of the financial organization shall be to keep up financial and money stability, to confirm the interchangeability of the Dinar, and to contribute in achieving the banking and money stability within the Kingdom likewise as promoting sustained economic process in accordance with the overall economic policies of the government. To achieve the above- mentioned objectives, CBJ assumes many tasks portrayed in drawing and implementing the financial policy within the Kingdom through an integrated system of monetary policy instruments, setting a evaluation policy of the Dinar compatible with the Jordanian economy, maintaining and managing the Kingdom’s reserves of gold and foreign currencies, regulation credit within the Jordanian economy so as to realize financial and money stability likewise as comprehensive economic process, and issue and regulation bank notes and coins. Subsequently, the central bank plays necessary role within the economic resource allocation of the country. The banking industry may be a major issue that affects the organization of social and economic life cycle within the economies of the planet. it is thought about as associate degree indicator of economic and social growing.. Also, developed financial set up ought to be characterized by the existence of a contemporary and complicated banking industry that contributes to achieving economic balance. It conjointly encourages domestic and foreign investment through the banking system’s ability to states. The aim of the banking industry is to draw in savings domestically and abroad, and direct those savings into productive investment. As a result, this contributes to the accomplishment of economic and social development method, and conjointly facilitates investment activity.
Against the backdrop of important structural reforms and terms of trade gains, India recorded strong growth in recent years in both economic activity and financial assets. Increased diversification, commercial orientation, and technology-driven inclusion have supported growth in the financial industry, backed by improved legal, regulatory, and supervisory frameworks. Yet, the financial sector is grappling with significant challenges, and growth has recently slowed. High nonperforming assets (NPAs) and slow deleveraging and repair of corporate balance sheets are testing the resilience of the banking system and holding back investment and growth.
This document discusses liquidity management challenges for Islamic financial institutions. It summarizes that Islamic banks have fewer short-term funding options than conventional banks. It then outlines some liquidity management tools available to Islamic banks, including sukuk, inter-bank placements, and commodity murabahah transactions. The document reviews developments in 2014, including increased sukuk issuance, and previews expected challenges in 2015 from Basel III liquidity regulations. It concludes that effective liquidity management remains a challenge for Islamic banks due to the lack of an Islamic interbank market and sufficient short-term Shariah-compliant instruments.
The document discusses trends in the global Islamic finance industry, prospects for its sustainability, and key challenges. It notes that Islamic finance has grown to nearly a $1 trillion industry spread across 70 countries, with some regions like the Gulf seeing exceptional growth. While initially faith-driven, Islamic finance is becoming institutionalized and seen as a parallel system that can complement conventional finance. The prospects for sustainability are promising due to growing investments across hubs and recognition of Islamic finance's appeal beyond religion. However, challenges remain around further developing regulatory frameworks and adapting innovative products without compromising sharia principles.
Islamic FINANCE AND BANKING SYSTEM Philosophies, Principles & Practices.pdfccccccccdddddd
This chapter provides an overview of economics and the Islamic economic system. It discusses:
1) The definition of economics and its origins in household management and resource allocation at a national level.
2) The two main branches of economics - microeconomics which analyzes individual behavior and macroeconomics introduced by Keynes which analyzes whole economies.
3) A brief history of the Islamic economic system which has existed since the time of the Prophet Muhammad but efforts to integrate Islamic principles only began in the 1970s. The chapter lays the foundation for understanding Islamic finance as part of the broader Islamic economic framework.
IFN Corporate Governance and Risk Management Report - 28 July 2014Mujtaba Khalid
The future of Islamic finance looks promising, with 10 of the world's 25 fastest growing markets located in Muslim-majority countries. However, leading Islamic banks have posted lower returns on equity compared to conventional banks, suggesting the need for policy and governance restructuring. The UK has aspirations to become an Islamic financial hub but lacks central bank regulations. There are opportunities for Islamic finance in the UK given its growing Muslim population, yet Islamic retail banking has yet to take off due to insufficient disclosure, risk management, and consumer relations compared to global standards. Policymakers and industry participants must address these issues to strengthen governance and oversight in the UK Islamic finance sector.
The document discusses accounting standards for Islamic banking as established by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). AAOIFI prepares Shariah-compliant accounting, auditing, governance and ethics standards for Islamic banks. It aims to standardize practices according to Shariah principles and rules to support the growth of the Islamic finance industry. The standards address general presentation and disclosures requirements in financial statements for Islamic banks, including additional statements on restricted investments, zakat and qard funds. They also require disclosures on Shariah advisory roles, prohibited earnings, investment account types and allocation of profits.
Islamic finance has moved from being just another buzzword in last decade to an extremely popular and viable alternative in today’s interconnected financial world. Islamic asset management has been at the forefront of revolution along with Islamic Banking.
The document provides an overview of sustainability developments in Islamic finance in the UAE. Key points include:
- The UAE has taken several regulatory steps to promote sustainable finance, beginning in 2016 with the Dubai Declaration on Sustainable Finance.
- In 2019, Abu Dhabi launched the Abu Dhabi Sustainable Finance Declaration and Forum to further the sustainability agenda.
- The UAE has set a national net zero emissions target by 2050 and will host the COP28 climate conference in 2023.
- Sustainability and ESG considerations are increasingly being integrated across the Islamic finance industry in the UAE, supported by the regulatory framework.
The document discusses India's financial sector reforms over the past decade. It notes that India's reforms have been gradual, cautious and avoided major crises seen elsewhere. The reforms aimed to remove financial repression, make the sector efficient and competitive, allow market determination of interest rates, and prepare the system for global competition while maintaining stability. This was achieved through prudent measures, increasing competition, enhancing market forces, strengthening institutions and adopting international best practices. The reforms transformed India's financial system into a more sophisticated, diverse and resilient one.
Islamic Finance and Economic Growth in the Kingdom of Saudi Arabia (KSA): An ...scmsnoida5
This paper examines the relationship between
the development of Islamic finance system and
economic growth in the Kingdom of Saudi
Arabia. The relationship between Islamic
banking and economic growth is done using
econometric analysis. In this analysis, we use
Islamic banks’ financing credited to private
sector through modes of financing as a proxy for
the development of Islamic finance system and
Gross Domestic Product (GDP), Gross Fixed
Capital Formation (GFCF) and Foreign Direct
Investment inflow (FDI) as proxies for real
economic growth. For the analysis, the unit root
test, co-integration test and Granger causality
tests were done. Based on the availability of data,
time series data from 1990 to 2010 is used to
examine the relationship between Islamic banks’
financing and GDP, FDI, and GFCF. Data for
all variables are stationary after first difference.
The co-integration results provide an evidence of
a unique cointegrating vector. In other words, there is a long-term stable relationship between
Islamic banks’ financing and economic growth
in the Kingdom of Saudi Arabia. That means
Islamic banks’ financing and economic growth
relationships are moving together in the longrun.
The results from causality tests show that causality
relation exist from the Islamic banks’ financing
to investment and Foreign Direct Investment
(FDI) of the Kingdom of Saudi Arabia. The
results indicate that Islamic finance is a suitable
environment for attracting FDI and FDI
reinforces economic growth.
The document is the July 2015 newsletter of the Institute of Finance & Management (IFM). It announces that IFM has signed memorandums of understanding with several partners to provide training and issue certificates in Islamic finance and economics. It also lists upcoming training events and encourages readers to visit IFM's website for more information.
The document is the July 2015 newsletter of the Institute of Finance & Management (IFM). It announces that IFM has signed memorandums of understanding with several partners to provide training and issue certificates in Islamic finance and economics. It also lists upcoming training events and encourages readers to visit IFM's website for more information on its certificate programs.
The document summarizes key findings from the Islamic Finance Development Report 2019. It finds that global Islamic finance assets grew to $2.5 trillion in 2018, a 3% increase, with slower growth seen in leading markets due to economic sluggishness. Malaysia, Bahrain and the UAE continued to lead in overall Islamic finance development according to the Islamic Finance Development Indicator (IFDI), which assesses 57 countries across quantitative, knowledge, governance, CSR and awareness factors. Sukuk issuance grew strongly at 10% while other sectors saw weaker growth. Governments continued supporting industry expansion through new regulations and education initiatives.
This document discusses the history and development of Islamic accounting and auditing standards in Malaysia. It provides details on:
- The establishment of the first Islamic banks and universities in Malaysia in the 1980s to support Islamic finance.
- Key organizations established by the Malaysian government to regulate and develop Islamic economic initiatives and institutions.
- The issuance of guidelines by Bank Negara Malaysia on financial reporting for Islamic financial institutions, which introduced additional reporting requirements compared to conventional standards.
- The role of the Malaysian Accounting Standards Board in developing the first Islamic financial reporting standard and other exposure drafts to provide accounting guidance for core Islamic finance concepts.
- Challenges in standardization due to differences of opinion among
This document summarizes the Islamic finance education landscape and developments in 2016. It finds that while the Islamic finance industry is growing, there is a shortage of qualified human resources which poses a risk. In 2016, several developments aimed to address this, including new Islamic finance centers in Pakistan backed by the UK, and a partnership between the BIBF and University of Bolton for an MBA program. Online education is growing, with initiatives launched by organizations like IDB's IRTI on edX and IFSB's new e-learning portal. Looking to 2017, online learning is expected to continue growing, which will benefit Islamic finance education and the industry overall.
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Financial reforms in response to the global financial crisis
1. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Doha, Qatar – 7 April 2013
Forum Theme
Financial Reforms in Response to the
Global Financial Crisis: Lessons for Islamic
Finance in Ensuring Financial Stability
Paper by:
H.E. Dr Zeti Akhtar Aziz
Governor, Bank Negara Malaysia
2. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Doha, Qatar - 7 April 2013
Forum Theme
Financial Reforms in Response to the
Global Financial Crisis: Lessons for Islamic
Finance in Ensuring Financial Stability
Paper by:
H.E. Dr Zeti Akhtar Aziz
Governor, Bank Negara Malaysia
ISLAMIC FINANCIAL SERVICES BOARD
3. The views expressed in this publication are those of the author(s) and not necessarily
the views of the Islamic Financial Services Board.
The publication is available for download from
the IFSB website (www.ifsb.org)
Islamic Financial Services Board 2013. All rights reserved.
Brief excerpts may be reproduced or translated provided source is cited.
Contact information:
Islamic Financial Services Board
Level 5, Sasana Kijang, Bank Negara Malaysia
No. 2, Jalan Dato’ Onn
50480 Kuala Lumpur, Malaysia
Tel : + 6 03 9195 1400
Fax : + 6 03 9195 1405
Email : ifsb_sec@ifsb.org
ISBN: 978-967-5687-22-8
4. ABOUT THE ISLAMIC FINANCIAL SERVICES BOARD (IFSB)
The IFSB is an international standard-setting organisation which was officially
inaugurated on 3 November 2002 and started operations on 10 March 2003. The
organisation promotes and enhances the soundness and stability of the Islamic financial
services industry by issuing global prudential standards and guiding principles for the
industry, broadly defined to include banking, capital markets and insurance sectors. The
standards prepared by the IFSB follow a lengthy due process as outlined in its
Guidelines and Procedures for the Preparation of Standards/Guidelines, which includes
the issuance of exposure drafts and the holding of workshops and, where necessary,
public hearings. The IFSB also conducts research and coordinates initiatives on
industry-related issues, as well as organises roundtables, seminars and conferences for
regulators and industry stakeholders. Towards this end, the IFSB works closely with
relevant international, regional and national organisations, research/educational
institutions and market players.
For more information about the IFSB, please visit www.ifsb.org.
5.
6. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Doha, Qatar – 7 April 2013
Lessons for Islamic Finance in Ensuring Financial Stability
Doha, Qatar – 7 April 2013
FINANCIAL REFORMS IN RESPONSE TO THE GLOBAL
FINANCIAL CRISIS: LESSONS FOR ISLAMIC FINANCE
IN ENSURING FINANCIAL STABILITY
H.E. Dr Zeti Akhtar Aziz
Governor, Bank Negara Malaysia
1
Introduction
It is my honour to be here in Doha to speak at this 7th Islamic Financial Stability Forum
on “Financial Reforms in Response to the Global Financial Crisis: Lessons for Islamic
Finance in Ensuring Financial Stability”. Efforts to implement international regulatory
reforms to strengthen the global financial system are now well under way. Today’s forum
provides us with an opportunity to reflect on these reforms and to discuss the lessons
that can be drawn in our efforts to ensure the resilience of the Islamic financial industry
in this more challenging environment.
Many of the international regulatory reforms have focused on addressing the issues that
have contributed to, or that have amplified, the global financial crisis. They include
structural reforms aimed at strengthening the fundamental link between financial
systems and the real economy – in particular, to protect insured deposits from excessive
risk-taking, over-leverage and unfettered innovation. Leading up to the crisis, banking
institutions took on risks that were not sufficiently captured by the prudential regulatory
frameworks’ oversight systems. The resulting consequences were compounded by the
over-reliance on self-regulation and market discipline to correct distortions, which proved
to be greatly misplaced. In addition, the incentive and value systems had become
excessively preoccupied with short-term gains. In response to these issues, the existing
prudential regulatory framework has been strengthened, notably through the Basel III
reform package and reforms to compensation practices. The reforms have also focused
on addressing gaps in the regulatory framework with the growing significance of non-bank
and shadow banking activities. This has also been reinforced by moves to
strengthen the macro-prudential orientation of regulation to complement micro-prudential
supervision in order to manage the risks arising from the interdependencies within the
financial system.
The cross-border dimension of finance has also raised new challenges particularly in the
area of resolution, leading to efforts through the Financial Stability Board to develop
effective resolution regimes to resolve systemically important financial institutions in an
7. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Financial Reforms in Response to the Global Financial Crisis:
Lessons for Islamic Finance in Ensuring Financial Stability
Doha, Qatar – 7 April 2013
orderly manner. A continuing challenge for the global reform agenda, however, has been
the need to address issues that are national in nature but global in scope for the financial
institutions and markets. This has increased the need for clear mandates and effective
coordination arrangements between national authorities, both within jurisdictions and
across borders.
Regulatory reforms to strengthen the global financial system
With the focus of the advanced economies shifting to achieving a durable recovery,
maintaining the momentum in implementing global regulatory reforms has become more
challenging. Following the financial meltdowns and disruptions experienced during the
recent global financial crisis, the Islamic financial industry has fared relatively well. In fact,
despite the challenging environment during the past six years, Islamic finance has
experienced vibrant growth. Strong performance has been recorded in several countries,
with total Islamic banking assets growing at a compound annual rate of more than 40%.
While there are certainly wide-ranging lessons that Islamic finance can draw from the
global financial crisis, there may also be lessons that Islamic finance can offer in
evolving financial systems that will effectively serve those economies.
The strong performance of Islamic finance has been underpinned by its inherent
strengths. In encouraging business and trade activities that generate fair and legitimate
profit, Islamic finance is subject to an explicit requirement of materiality and validity of
transaction. This requirement ensures the channelling of funds into real business
activities, thus reinforcing the link between financial and productive flows and reducing
the risks associated with highly leveraged activities. The practice of risk-sharing in
Islamic finance also strengthens the incentives for Islamic financial institutions to
conduct the appropriate due diligence, reinforced by high standards of disclosure and
transparency, and more prudent risk management practices. This, in turn, raises the bar
for governance practices in Islamic financial institutions.
These foundations in Islamic finance have also been reinforced by the global efforts to
strengthen the international financial architecture of Islamic finance. The Islamic
Financial Services Board (IFSB), since its establishment in 2002, has been at the
forefront of the international efforts to increase regulatory cooperation and encourage
uniformity of regulatory frameworks and enhanced monitoring of financial risks in the
different jurisdictions in the Islamic financial system. The IFSB has introduced prudential
standards for the Islamic financial services industry – in the areas of capital adequacy,
risk management, corporate governance and Sharī`ah governance. The Accounting and
Auditing Organisation for Islamic Financial Institutions has also to date contributed to the
2
8. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Financial Reforms in Response to the Global Financial Crisis:
Lessons for Islamic Finance in Ensuring Financial Stability
Doha, Qatar – 7 April 2013
issuance of more than 80 standards in the areas of Sharī`ah, accounting, auditing, ethics
and governance for the international Islamic financial industry.
Following increased liberalisation, the role of Islamic finance is now becoming
significantly more globalised. This trend has resulted in a strengthening of global
financial and economic linkages, particularly among the emerging economies. Total
global asset size of the Islamic financial system has now surpassed the USD1 trillion
threshold. This trend has not only supported domestic demand but has also facilitated
increased trade and investment flows across borders. Increased globalisation and
greater international integration of Islamic finance, however, are associated with
correspondingly higher risks arising from the contagion effects from external
developments. This requires the current framework for regulation and supervision of
Islamic finance to be broadened to address the new challenges that have emerged. In
this respect, lessons can be drawn from the recent international financial reforms to
address the international dimension of finance, both for financial institutions and financial
markets. Equally important is the governance structure and practices for the effective
coordination of efforts to secure financial stability within the national and international
financial systems.
Key dimensions for improved regulation and increased regulatory oversight for
Islamic finance
Let me touch on key dimensions of financial regulation that have been the focus of the
recent global regulatory developments, and which have a particular significance for
Islamic finance. The first aspect relates to the effective implementation of the
international regulatory and supervisory standards and best practices to secure financial
stability while promoting more consistent regulatory and supervisory frameworks across
borders. In Islamic finance, these standards have taken into account the distinct
characteristics and specificities of Islamic finance and the unique combination of risks
associated with Sharī`ah-compliant financial business.
Several jurisdictions have already commenced implementation of the cross-sectoral
prudential standards that have been issued by the IFSB. The effective implementation of
these standards in different jurisdictions will also chart the path for greater harmonisation
of prudential standards that promote the soundness and stability of Islamic financial
institutions. A survey conducted by the IFSB in 2011 indicated that nine countries had
implemented the various standards issued by the IFSB, and 18 countries were expected
to implement them within the next five years. The next stage is to ensure consistent
implementation of these standards to obtain greater certainty in the regulatory treatment
of Islamic financial transactions. Greater global cooperation and collaborative action is
3
9. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Financial Reforms in Response to the Global Financial Crisis:
Lessons for Islamic Finance in Ensuring Financial Stability
Doha, Qatar – 7 April 2013
vital to this process by enhancing regulatory harmonisation and promoting the full
adoption of the IFSB’s standards. Full adoption would reduce the opportunity for
regulatory arbitrage arising from cross-sectoral differences and cross-border differences,
including the differences arising from the regulation of the conventional and Islamic
financial sectors.
Fundamental to the application and enforcement of these standards is a clear
understanding and interpretation of the standards across jurisdictions. This needs to be
supported by capacity building to enhance jurisdictional preparedness prior to the
implementation of the standards. Post-implementation, a transparent and credible
assessment process can be developed to assist jurisdictions in evaluating their level of
compliance with the international standards and to make recommendations for
improvements. These developments would, over time, lead to strengthening of the
domestic regulatory framework to bring it into line with the IFSB standards, alongside the
core principles and standards adopted by the Basel Committee, the International
Association of Insurance Supervisors and the International Organization of Securities
Commissions. Indeed, with the growing global significance of Islamic finance,
assessments such as those by the International Monetary Fund–World Bank Financial
Sector Assessment Program (FSAP) would be incomplete without an assessment of the
regulatory and supervisory system for Islamic finance. Going forward, the
implementation of and compliance with the IFSB standards at the national level should
form part of the FSAP assessments.
A second aspect of financial regulation is the importance of the macro-prudential
dimension of regulation in preserving financial stability. New or strengthened mandates
for macro-prudential policies are being established in a growing number of jurisdictions,
with central banks and other financial authorities now being vested with the powers and
tools to manage excesses and imbalances in the financial system. Post-crisis, there has
been greater attention paid to the role of macro-prudential measures as a complement to
micro-surveillance and supervision. This involves the incorporation of horizontal
assessments of risks across institutions, sectors and national borders, including the risks
in asset markets.
The global financial crisis has also demonstrated the need for central banks and other
regulatory authorities to have the means for addressing risks from the shadow banking
system. For some jurisdictions, this segment has grown to be even larger than the
traditional banking sector. While entities in this sector have an important role in
complementing banks and other regulated financial institutions in supplying credit and
liquidity to the economy, their activities, if not adequately regulated, may have a
disruptive impact on the overall financial system. Surveillance and monitoring
4
10. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Financial Reforms in Response to the Global Financial Crisis:
Lessons for Islamic Finance in Ensuring Financial Stability
Doha, Qatar – 7 April 2013
frameworks are therefore being significantly enhanced to better capture the risks and
vulnerabilities emerging from areas beyond the traditional perimeters of regulated
financial institutions and markets. This is of particular importance in the context of
Islamic finance. In this respect, there is a need for heightened surveillance over real
estate and commodity markets. Also important is a greater understanding of the
interrelationships between the financial and the real sector, including the potential for the
second-round effects that are transmitted within and across sectors of the economy.
The third aspect of financial regulation is the role of financial safety nets that would
promote certainty and public confidence, particularly in times of financial stress and
crisis. In addition, there is a need for a comprehensive and effective resolution regime. In
the conventional system, this regime is gaining traction at the global level, including
instituting changes to the legal framework to support the development of the resolution
mechanisms so as to provide timely, effective and cohesive responses to the financial
distress produced during a crisis. Well-developed legal frameworks would also secure
the appropriate protection of depositors, which is critical to preserving confidence in
financial institutions and the system as a whole. In Islamic finance, it is important that
such legal frameworks provide for court recognition and acceptance of Islamic contracts
within the common and civil law systems, with a consistent approach of interpreting the
rights of the contracting parties based on Sharī`ah principles. A legal framework that
considers the specificities of Sharī`ah contracts would assist in ensuring greater
certainty in the legal and regulatory treatment of Islamic financial transactions.
In Malaysia, a new legal framework for Islamic banking and Takāful will come into force
this year and pave the way for the development of an end-to-end Sharī`ah-compliant
regulatory framework for the conduct of Islamic financial institutions. This new framework
clarifies the fundamental requirements of Sharī`ah that must be adhered to for the
contractual arrangements between the financial institution and customer to remain
enforceable. The framework also outlines the operational requirements that would
support the effective application of Sharī`ah principles in the conduct of Islamic financial
institutions. This is to strengthen their risk management practices to address the distinct
risks beyond the traditional credit, market and liquidity risks, so as also to include
inventory risk, ownership risk and Sharī`ah compliance risk. The legislation also provides
for the resolution of Islamic financial institutions to be in line with distinctive elements of
the relevant Islamic contracts, thus improving the legal and procedural aspects for the
orderly resolution of Islamic financial institutions.
The fourth aspect is the increasing importance of the cross-border dimension of financial
regulation. In the world of conventional finance, there has been an unprecedented
intensification of cross-border collaborative efforts in the aftermath of the global financial
5
11. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Financial Reforms in Response to the Global Financial Crisis:
Lessons for Islamic Finance in Ensuring Financial Stability
Doha, Qatar – 7 April 2013
crisis. Supervisory authorities have significantly increased the focus on developing a
more holistic evaluation of risks and vulnerabilities confronting institutions that operate
across borders, resulting in the strengthening of these oversight arrangements to
manage these risks. In Islamic finance, the close linkages with the real economic sector,
including across borders, that are undertaken through the various modes of Islamic
financing contracts can present specific challenges for supervisors wishing to obtain a
complete understanding of the entire risk spectrum. Given the added considerations for
the supervision of risk-taking activities by Islamic financial institutions that are
undertaken across jurisdictions, collaboration among supervisory authorities has to
become an integral part of the overall supervisory framework. Regular engagement
between home and host supervisors to share information and supervisory assessments
is particularly important to ensure effective supervisory oversight as Islamic financial
institutions become more international in their operations.
Such cooperation is already taking place through various informal arrangements. The
growing interconnectedness in the global Islamic financial system, however, will benefit
from having a more structured framework for collaboration among supervisors to
improve the efficiency of the supervisory processes and to allow for early detection of
cross-border transmissions of risk from group-wide activities. The supervisory college
arrangement has, for example, been particularly useful in facilitating better information
flows and coordination between home and host supervisory authorities. Such platforms
can also prove useful in evolving the supervisory framework for cross-border operations
of Islamic financial institutions. The level of cooperation can also be extended to include
arrangements for responding to crisis situations, including those that concern the
resolvability of large and complex Islamic financial institutions.
A strategic platform for constructive dialogue among the regulators of the international
Islamic financial system to discuss the risks and vulnerabilities facing Islamic financial
institutions can also be part of the structured framework for collaboration. Existing
arrangements such as this Islamic Financial Stability Forum can be leveraged upon to
serve as this platform, to facilitate better understanding of emerging developments in the
Islamic financial system and their implications for national and global financial stability.
6
12. SEVENTH ISLAMIC FINANCIAL STABILITY FORUM
Financial Reforms in Response to the Global Financial Crisis:
Lessons for Islamic Finance in Ensuring Financial Stability
Doha, Qatar – 7 April 2013
7
Conclusion
Let me conclude my remarks. The effective implementation of the wide-ranging global
financial reform measures remains an important imperative to ensure financial stability.
Despite its resilience during the recent crisis, aspects of these reforms are equally
relevant to Islamic finance so as to avoid the weaknesses that plunged the international
financial system into its deepest crisis in decades. Continuous efforts to advance the
implementation of the reform measures, particularly the prudential standards for the
Islamic financial industry, and to enhance further the rigour of the monitoring and
assessment process would greatly reinforce the foundations for Islamic finance and its
prospects for preserving financial stability. At the same time, by upholding the
fundamental tenets of Sharī`ah, the true practice of Islamic finance is exemplified. This,
in turn, resonates with the global call for building stable financial systems that will
achieve their intended purpose of effectively serving the functioning of economies and
the well-being of societies.
13.
14. H.E. Dr Zeti Akhtar Aziz
Governor, Bank Negara Malaysia
H.E. Dr Zeti Akhtar Aziz was appointed Governor of Bank Negara Malaysia (The Central Bank of Malaysia)
in May 2000. As Governor, she has a key role in monetary policy formulation and implementation, and in
ensuring the stability of the Malaysian financial system. In addition, she has overseen the successful
transformation of the Malaysian financial system into one of the most developed and resilient financial
systems among the emerging economies. In particular, she has been involved in leading the development of
the Financial Sector Blueprint, which charts the direction of Malaysia’s financial sector development over the
next ten years; spearheading the development of Islamic finance, domestically and globally; and
participating in efforts to enhance the contribution of small and medium-size enterprises to the Malaysian
economy. H.E. Dr Zeti is also actively involved in shaping the future of financial cooperation in the Asian
region, and has been an important voice for the emerging economies in the international financial fora.
To strengthen regional integration, H.E. Dr Zeti chaired the Executives' Meeting of the East Asia-Pacific
Central Banks (EMEAP) Taskforce on “Regional Cooperation among Central Banks in Asia”, which was
tasked with drawing up the blueprint for future financial cooperation in the region. She is also Co-chair of the
Financial Stability Board's Regional Consultative Group for Asia, together with the Bank of Korea. H.E. Dr
Zeti is a member of the South East Asian Central Banks (SEACEN) Board of Governors and the Chairman
of the SEACEN Board of Directors. She has also been a member of the Bank for International Settlements
(BIS) Central Bank Governance Group since 2001, and is one of the founding members of the BIS Asian
Consultative Council.
H.E. Dr Zeti has been actively involved in the development of Islamic finance in both the domestic and
international arenas. She chaired the Steering Committee for the establishment of the Islamic Financial
Services Board (IFSB) and served as the IFSB Council Chairman for the 2007 term. She was also Chairman
of the international taskforce on “Islamic Finance and Global Financial Stability” and of the taskforce on
“Liquidity Management”, tasked with developing a mechanism to facilitate cross-border liquidity
management. H.E. Dr Zeti is currently Chairperson of the International Islamic Liquidity Management
Corporation Board Executive Committee. She also served as Chairperson of the Governing Board of the
International Islamic Liquidity Management Corporation (IILM) until 2011. H.E. Dr Zeti has played a leading
role in developing Malaysia as a centre for the origination, distribution and trading of Sukūks under the
Malaysia International Islamic Financial Centre (MIFC) initiative. In 2002, she led a team that launched the
Malaysian global Islamic Sukūk, the world’s first Islamic Sukūk to be issued by a sovereign country.
H.E. Dr Zeti has served as a member of the United Nations General Assembly Commission of Experts on
Reform of the International Monetary and Financial System, a high-level taskforce established to examine
possible reform of the global financial system.
H.E. Dr Zeti received her Bachelor of Economics (Honours) from the University of Malaya and her PhD from
the University of Pennsylvania.