www.theislamicglobe.com - The Secretary-General of the Islamic Financial Services Board (IFSB), Jaseem Ahmed noted that progressive transformations in the Islamic financial services industry over the last few decades have led to the industry’s greater integration into the global financial system. “Islamic finance shares with Europe a collective interest in cross-border cooperation, in regional cooperation, and in greater integration with the global economy.” Against the backdrop of the global crisis he further noted that “The expansion in Islamic finance and the changes in the global regulatory environment in recent years underscore the need for strengthened risk management within institutions offering Islamic financial services.(source)
These institutions face a unique set of risks. In addition, they frequently operate in environments in which markets and the wider infrastructure of liquidity and risk management are still undergoing development. Risk management and monetary control are critical issues in Islamic finance and there can be no complacency in this regard. While much has been achieved, much more needs to be done.”
Jaseem was speaking at a Workshop on Islamic Finance, jointly organised by the IFSB and the European Central Bank (ECB) in Frankfurt on 26 January 2012. The Workshop aimed to provide an overview of the Islamic financial services industry and provide empirical evidence on the impact of Islamic finance on financial stability. It also discussed the interaction of Islamic and Western financial systems.
The Workshop brought together 60 participants from among senior financial sector supervisors, market players and academicians discussing, among other things:
a) Latest overview of the Islamic financial services industry and its developmental considerations;
b) The value proposition of Islamic finance in Europe;
c) Challenges facing the industry, especially where the countries are new to Islamic finance;
d) Comparative research on the risk analysis, business model, stability and efficiency of Islamic and conventional banks; and
e) Lessons learned from crisis and the recent development in global regulatory reforms, as well as how Islamic finance interacts with conventional finance.
European supervisory agencies expressed interest in Islamic finance at the Workshop while highlighting the challenges faced in their jurisdictions in terms of the need for greater standardisation, greater public awareness and better understanding of issues related to Shari`ah compliance. It was also highlighted that in such jurisdictions, the industry may face different expectations from investors and shareholders. With regard to regulatory challenges, the Workshop discussed issues emerging from the Basel III framework such as regulatory capital. The comparative research findings presented also revealed the stability of Islamic banks over its conventional counterparts and further suggested that this was strongly linked to higher capital ratios, and better quality capital, held by Islamic banks. However, while Islamic banks were found to be more resilient to local or national crises, the research papers suggested that a global crisis would affect Islamic and conventional banks equally. Given the interest of the ECB and its member institutions in the subject, it was agreed to pursue further opportunities for collaboration on Islamic finance.
Source: http://www.theislamicglobe.com/index.php?option=com_content&view=article&id=1350:the-ifsb-and-the-european-central-bank-jointly-organised-workshop-on-islamic-finance-in-frankfurt-germany&catid=4:press-release&Itemid=14 - Feb 4, 2012
These institutions face a unique set of risks. In addition, they frequently operate in environments in which markets and the wider infrastructure of liquidity and risk management are still undergoing development. Risk management and monetary control are critical issues in Islamic finance and there can be no complacency in this regard. While much has been achieved, much more needs to be done.”
Jaseem was speaking at a Workshop on Islamic Finance, jointly organised by the IFSB and the European Central Bank (ECB) in Frankfurt on 26 January 2012. The Workshop aimed to provide an overview of the Islamic financial services industry and provide empirical evidence on the impact of Islamic finance on financial stability. It also discussed the interaction of Islamic and Western financial systems.
The Workshop brought together 60 participants from among senior financial sector supervisors, market players and academicians discussing, among other things:
a) Latest overview of the Islamic financial services industry and its developmental considerations;
b) The value proposition of Islamic finance in Europe;
c) Challenges facing the industry, especially where the countries are new to Islamic finance;
d) Comparative research on the risk analysis, business model, stability and efficiency of Islamic and conventional banks; and
e) Lessons learned from crisis and the recent development in global regulatory reforms, as well as how Islamic finance interacts with conventional finance.
European supervisory agencies expressed interest in Islamic finance at the Workshop while highlighting the challenges faced in their jurisdictions in terms of the need for greater standardisation, greater public awareness and better understanding of issues related to Shari`ah compliance. It was also highlighted that in such jurisdictions, the industry may face different expectations from investors and shareholders. With regard to regulatory challenges, the Workshop discussed issues emerging from the Basel III framework such as regulatory capital. The comparative research findings presented also revealed the stability of Islamic banks over its conventional counterparts and further suggested that this was strongly linked to higher capital ratios, and better quality capital, held by Islamic banks. However, while Islamic banks were found to be more resilient to local or national crises, the research papers suggested that a global crisis would affect Islamic and conventional banks equally. Given the interest of the ECB and its member institutions in the subject, it was agreed to pursue further opportunities for collaboration on Islamic finance.
Source: http://www.theislamicglobe.com/index.php?option=com_content&view=article&id=1350:the-ifsb-and-the-european-central-bank-jointly-organised-workshop-on-islamic-finance-in-frankfurt-germany&catid=4:press-release&Itemid=14 - Feb 4, 2012
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