However currently, the industry still has a long way to go before this expectation is satisfied. This was amongst the focal points highlighted by the expert speakers in the session entitled “Systemic Liquidity Arrangements and Macro Policy” in the 3rd Islamic Financial Services Board (IFSB) Summit held at the Phoenicia Intercontinental Beirut, this morning.
Dr V. Sundararajan of Centennial Holdings Inc. USA, Dr. Mohammed El-Qorchi of the International Monetary Fund (IMF), and Mr. Jacques Tripon of BNP Paribas were unanimous in calling for monetary authorities increase efforts in establishing the necessary infrastructure to promote soundness and stability of the Islamic financial system especially through mechanisms such as inter-bank money market and lenders of last resort.
In acknowledging the dire need for a more robust liquidity management arrangement for the Islamic financial services industry, Professor Rifaat Ahmed Abdel Karim, the Secretary-General of the IFSB, explained that the IFSB has already set up an Islamic Money Market Task Force to look into the relevant issues and recommend viable solutions that can help monetary authorities in forming their policy decisions.
In an earlier session on “Prudential Arrangements for the Stability and Development of Islamic Finance”, H.E. Mr Sabir Mohammed Hassan, Governor of Bank of Sudan, called for stronger disclosure regime for Islamic banks in line with the internationally recognized standards in order to reinforce public confidence. His view is supported by Dr Ishrat Husain, the former Governor of State Bank of Pakistan, who emphasized that institutions offering Islamic financial services can only be competitive against their conventional counterparts if they themselves adopt the internationally accepted best practices. Mr. Thomas J. Baxter, General Counsel and Vice President of the Federal Reserve Bank of New York, admitted that while there are a few major regulatory hurdles which need to be overcome before an Islamic bank can be licensed to operate in the US, none of them is insurmountable with carefully thought legal solutions.
The IFSB Summit, themed “Aligning the Architecture of the Islamic Finance to the evolving Industry Needs”, is one of the most prestigious annual gatherings of regulators, bankers, scholars and practitioners in the Islamic financial services industry. Held under the high patronage of H.E. Fuad Siniora, Prime Minister of Lebanon, and hosted by Banque du Liban, the Summit ends today.
Thursday, May 18- 2006 @ 16:15 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.