تنوع در مقررات موسسات مالی اسلامی
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|12046||2007||23 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : The Quarterly Review of Economics and Finance, Volume 46, Issue 5, February 2007, Pages 778–800
More than 200 Islamic Financial Institutions (IFIs) are reported to have total combined assets in excess of US$ 200 billion with an annual growth rate estimated between 10 and 15%. The regulatory regime governing IFIs varies across countries. International organizations have been established to set standards that would strengthen and eventually harmonize prudential regulations as they apply to IFIs. The paper contributes to the discussion on the nature of the prudential standards to be developed. It clarifies risks IFIs are exposed to and the type of regulation that would help to manage them. It considers that the industry is still evolving with an anticipated convergence of the practice of Islamic financial intermediation with its conceptual foundations. Accordingly, the paper contrasts the risks and regulation that would be needed in the case of Islamic financial intermediation operating according to core principles and current practice. Implications for approaches to capital adequacy, licensing requirements and reliance on market discipline are outlined. The paper suggests an organization of the industry that would allow it to develop in compliance with its principles and prudent risk management and to facilitate its regulation.
Islamic finance services are expanding worldwide.1 More than 200 Islamic Financial Institutions (IFIs) are reported to have total combined assets in excess of US$ 200 billion (General Council for Islamic Banks and Financial Institutions (GCIBAFI), 2005).2 Some observers expect that Islamic finance may be able to attract 40% of the total savings of the Muslim population worldwide within the next few years (Zaher & Hassan, 2001). To capitalize on the potential of that market, a number of global financial institutions – including Citibank, Hong Kong Shanghai Banking Corporation (HSBC), Goldman Sachs, BNP-Paribas and Union Bank of Switzerland (UBS) – have established Shariah compatible services ( Sundararajan & Errico, 2002). The growth of the industry and its potential impact raise public policy issues. International organizations and standard setters, national regulatory authorities, policy makers, and academia are focusing on IFIs’ risk management practices, the broad institutional environment in which they operate, and the regulatory framework that governs them. Institutions have been established notably the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the International Islamic Rating Agency (IIRA), the Islamic Financial Services Board (IFSB), and the Liquidity Management Center (LMC).3 Less widely understood than conventional finance, Islamic finance generates mixed perceptions on the risks it introduces. Thus, Islamic finance reminds of Merton's (1995) point that “less apparent understanding of the new environment can create a sense of greater risk even if the objective level of risk in the system is unchanged or reduced”. Thus Islamic finance viewed as financial innovation is generating concerns on its inherent risks and their possible spillover on the rest of the financial system (Merton, 1995). These concerns are compounded by features specific to Islamic finance. First, there is the divergence between the theory of Islamic finance, and the way it is practiced.4 Second, IFIs have to compete with conventional financial intermediaries while they do not have access to similar risk management tools. Third, each IFI's business conduct is idiosyncratic, shaped by its Shariah board, local legal tradition and interpretations, and the specific market's competitive pressure. Fourth, in many jurisdictions, IFIs need to comply with conventional finance regulations that may not be adapted to the business. Fifth, different schools of thought on Islamic finance offer different interpretations of permissible financial contracts. 5 This paper identifies IFIs’ risks and considers regulatory approaches that may help deal with them. It starts from the premise that the industry is evolving towards harmonization of core principles and convergence of practice with conceptual foundations. Consequently, the paper distinguishes between theory and practice of Islamic financial intermediation, the risks each presents, and the regulation they call for. Section 2 presents an overview of Islamic financial intermediation. Section 3 considers the nature of regulation that may be needed. Section 4 outlines a framework for the industry that would accommodate its founding principles and stability requirements. Finally, Section 5 concludes on the challenges lying ahead in the development of a regulatory framework for IFIs.
نتیجه گیری انگلیسی
Regulators cannot avoid acknowledging the presence of Islamic financial services and their market potential possibly close to 10% of global GDP. The industry's financial stability and its ability to efficiently intermediate the resources it mobilizes become critical for the communities it serves. However, the emerging and evolving nature of the industry and the competitive pressure it faces call for flexibility and alertness on the part of regulators. Under the circumstances, regulators would want to consider a two-pronged strategy: managing current practices and shaping the transition towards stable and efficient intermediation. In managing current practices, regulators need to consider: (a) the presence of balance sheets where profit and loss sharing accounts have limited weight, (b) an emphasis on trade and short-term financing, (c) risks akin to those faced by conventional banks, like “displacement risks”, and (d) market risks based on interest rates benchmarks used by conventional banks. Given the close affinity of prevailing practices with conventional banking, the regulatory framework cannot be very different. Prevailing IFIs’ practices seem to point to the need for equivalent emphasis on capital requirement, supervision and licensing, and a larger one on transparency and disclosure, compared to conventional banks. Supplemental rules addressing IFIs’ idiosyncratic features would enhance the effectiveness of existing regulatory arrangements. A long-term perspective of the industry calls for the development of a consensus vision. A significant intellectual effort geared at providing practical ways of achieving consistency between the demands of the market place and underlying principles will need to be ongoing. This effort would need to include debates that remain substantive, consultative, and evidence-based. In particular, it is important to be clear on the nature of Islamic financial intermediation with special attention given to the consistency of core principles and practice in shaping financial development. In line with a search for clarity an option for the vision may be to consider separating the functions of Islamic financial intermediation in windows or institutions. Such a separation could permit greater transparency of risks. It could also bring to bear the market discipline features embedded in the risk-sharing feature of Islamic financial intermediation, and contribute to its stability. An Islamic financial industry incorporating such segmentation would likely require lighter and more focused supplemental regulation.