9th Annual IFSB Summit Discusses Global Financial Reforms

The 9th Annual Summit of the Islamic Financial Services Board (IFSB) which is scheduled to be held at the Swissotel The Bosphorus in Istanbul on 16 – 17 May 2012 and hosted by the Central Bank of the Republic of Turkey (CBRT), will convene at a time when the aftermath of the global financial crisis continues to impact economies the world over and the Eurozone sovereign debt crisis continues unabated with several EU countries dipping back in to recession.

In a post sub-prime crisis international financial system, the watch words have been reformed, especially the Basel III capital reforms; risk mitigation; stress testing, financial stability; linking finance to serve the real economy and learning the lessons of the crisis. While the Islamic finance industry has shown remarkable resilience in the face of the crisis and is showing continued growth over the least few years, it has not been immune to the impact and reverberations of the crisis especially in an increasingly globalized financial world.

Not surprisingly, the theme of this year’s Summit, ‘Global Financial Reforms: The Changing Regulatory Model and Islamic Finance’ could not be more apt in aiming “to evaluate whether reforms in financial regulation structure and prudential standards equally equip the Islamic financial services industry in addressing its future challenges as well as identifying the priority areas in the prudential regulation of Islamic finance that may need focus and attention by regulators and market players alike.”

The organizers have managed to confirm the participation of several prominent international speakers led by Dr. Mahmoud Mohieldin, Managing Director of the World Bank and William Coen, Deputy Secretary-General, Basel Committee on Banking Supervision, Bank for International Settlements; and six major central bank governors including the Summit host, H.E. Dr Erdem Basci, Governor of the Central Bank of Turkey; H.E. Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia; H.E. Yves Mersch, Governor of the Banque centrale du Luxembourg; H.E. Yaseen Anwar, Governor of the State Bank of Pakistan; H.E. Dr. Jihad Al Wazir, Governor, Palestine Monetary Authority; and H.E. Sultan bin Nasser Al Suwaidi, Governor of the Central Bank of the UAE.

Also participating at the IFSB Summit will be Dr. Abdul Aziz Al Hinai, Vice President Finance, Islamic Development Bank; Dr. Kingsley Moghalu, Deputy Governor, Central Bank of Nigeria, Dr. Ibrahim M. Turhan, Chairman and CEO, Istanbul Stock Exchange, Turkey; Abayomi Alawode, Manager, Financial Systems Global Practice, The World Bank; Mahmoud Abu Shamma, CEO, International Islamic Liquidity Management Corporation (IILM); senior executives of market players, Shariah scholars and academics.

The session topics include, ‘International Regulatory Initiatives to Enhance Global Financial Stability’; ‘Impact of International Regulatory Initiatives on the Islamic Financial Services Industry’; ‘Regulatory Harmonization and Cross-border Linkages in Islamic Finance’; ‘Global Financial Infrastructure of Islamic Finance’; and ‘Global Regulatory Reform and the Prospects for the Islamic Financial Services Industry’.

The Islamic Financial Services Board (IFSB) has adopted two new Guiding Principles on Liquidity Risk Management and on Stress Testing for Islamic financial institutions – both are vital issues for the global Islamic finance industry.

The Guidelines were adopted at the 20th Meeting of the IFSB Council which was held in Manama, Bahrain on 29 March 2012, chaired by Rasheed M. Al-Maraj, Governor of the Central Bank of Bahrain and attended by the Dr. Ahmad Mohamed Ali, President of the Islamic Development Bank, and 17 governors and governors’ representatives from among the members of the Council.

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