better take into account the differential characteristics of IB products while ensuring a level playing field for Islamic and conventional banks. Centralized Shari’ah boards that help standardize industry practices and improve consumer perceptions have been established in only a limited number of countries. Further strengthening Shari’ah governance frameworks towards centralized Shari’ah boards could help ensure consistency in Shari’ah rulings within jurisdictions. There is also a need for better integration of the Shari’ah audit function in the enforcement
IRR acts as countercyclical buffer, albeit funded by IAH instead of shareholders. 16. The rise of hybrid financial products, where aspects of conventional finance are melded with those of IB, is transforming the risk profile of IB, with potentially significant financial stability implications . Opportunities for profit in an environment where the enabling infrastructure for traditional IB is not yet fully developed, have, at times, spurred IB products that replicate aspects of conventional banking products, creating in the process new risks. For example, some new