The Islamic Financial Services Board (IFSB) organised a Seminar on Islamic finance and global regulation themed, Moving Targets and New Horizons on 4 April 2017 in Kuala Lumpur, Malaysia. This Seminar was held as part of the IFSB Annual Meetings and Side Events 2017, which the Central Bank of Islamic Republic of Iran and Bank Negara Malaysia co-hosted.
The one-day seminar aimed to provide an interactive environment enabling speakers and participants to explore issues and share ideas around regulation and expanding outreach of Islamic finance, bringing together regulators, market players, academics, rating agencies and other stakeholders of the industry.
Dr. Akbar Komijani, deputy governor, Central Bank of the Islamic Republic of Iran (CBRI), in his Keynote address explained how the global financial crisis (GFC) had shed light on the complexities and interlinkages within the financial system, which shifted global regulatory focus to macroprudential policy and financial stability. Similarly, better alignment and more coordinated approach has been taken by various international standard setting and supervisory bodies in terms of the issuance and implementation of standards and guidelines. He also stated that amongst various global regulatory reforms and associated higher indicators, Islamic finance also has to contend with its own obstacles, notably the lack of liquidity instruments.
Dr. Komijani also spoke about CBRI’s intentions to issue more Islamic instruments to facilitate monetary and fiscal policy in the country. The IFSB’s technical assistance and implementation work was noted as being key facilitator for the industry and for member jurisdictions. He also proposed the IFSB to coordinate the set-up of a consultancy group, leveraging from skills of its members, to aid and assist development of Islamic finance in various member jurisdictions.
In his welcoming remarks, Jaseem Ahmed, Secretary-General of the IFSB, welcomed the participants to the Seminar and expressed his thanks to Bank Negara Malaysia and CBRI for hosting the event. His speech focused on two key themes namely Islamic finance and global regulatory changes, and new horizons such as FinTech and financial inclusion. Jaseem stated that the Islamic financial services industry (IFSI) is now worth almost USD 2 trillion globally and has achieved domestic significance in 12 jurisdictions. In line with the global regulatory reforms, the IFSB has issued a number of prudential standards across all sectors to compliment the work of comparator standard setters such as the Basel Committee, IOSCO and the IAIS. The implementation of these standards has helped the member regulatory and supervisory authorities to align their regulatory regime with global best requirements, helping the market players to effectively manage their risks. He also observed that many post-GFC reforms are still being implemented globally and there are continuing difficulties for the Islamic finance industry in respect to liquidity and liquidity coverage ratio compliance due to the lack of Shari’ah compliant high quality liquid assets.