Search Results

You are looking at 1 - 4 of 4 items for :

  • "IBS financing" x
Clear All
Aledjandro Lopez Mejia, Suliman Aljabrin, Rachid Awad, Mr. Mohamed Norat, and Mr. In W Song
This paper aims at developing a better understanding of Islamic banking (IB) and providing policy recommendations to enhance the supervision of Islamic banks (IBs). It points out and discusses similarities and differences of IBs with conventional banks (CBs) and reviews whether the IBs are more stable than CBs. Given the risks faced by IBs, the paper concludes that they need a legal, corporate and regulatory framework as much as CB does. The paper also argues that it is important to ensure operational independence of the supervisory agency, which has to be supported by adequate resources, a sound legal framework, a well designed governance structure, and robust accountability practices.
International Monetary Fund. Middle East and Central Asia Dept.
This paper presents country experiences with reforms to strengthen regulatory oversight of the Islamic banking sector. Based on the selected country experiences, a number of important lessons and policy options can be drawn that have implications for the stable and sound development of Islamic banking. An enabling regulatory and institutional framework and a level playing field for conventional and Islamic banks is critical for the sound and stable growth of the Islamic banking industry. The country experiences also underscore the importance of providing an enabling framework while letting market forces determine the size of the industry.
Aledjandro Lopez Mejia, Suliman Aljabrin, Rachid Awad, Mr. Mohamed Norat, and Mr. In W Song

risk has become a key risk faced by IBs. This is consistent with empirical findings indicating that: i) there are few significant differences in the business models of IBs and CBs ( Beck, Demirgüç-Kunt and Merrouche, 2013 ); ii) a small portion of IBs financing is based on profit loss sharing, and (iii) Islamic accounts are not very different from conventional deposits as the rate of return on PSIAs is closely pegged to conventional deposits ( Chong and Liu, 2009 , and Khan, 2010 ). Given the need to comply with Shariah law, IBs are prohibited from undertaking

International Monetary Fund. Middle East and Central Asia Dept.

structure of the IBs is relatively diversified, many of the smaller IBs are reported to have concentrated portfolios. 7. Bahrain IBs finance their operations using both domestic and foreign sources of funding ( Figure 2 ) . Domestic sources of funding account for about 64 percent, of which private non-bank enterprises and households account for about 36 percent. Interbank deposits are a significant source of funding, accounting for 18 percent of total funding sources. Government deposits are small, accounting for about 4 percent. Other funding comes from head offices