The provision and use of financial services and products that conform to Islamic religious principles pose special challenges for the identification, measurement, monitoring, and control of underlying risks, asserts a report recently released by the International Monetary Fund (IMF). Effective and efficient risk management in Islamic financial institutions has assumed particular importance as they endeavor to cope with the challenges of globalization.
This requires the development of not only a more suitable regulatory and disclosure framework, but also the development of new financial instruments and institutional arrangements to provide an enabling operational environment for Islamic finance. The recent establishment of the Islamic Financial Services Board (IFSB), facilitated by the IMF, addresses these needs.
Headquartered in Kuala Lumpur, Malaysia, the IFSB will serve as an association of institutions that have responsibility for the regulation and supervision of the Islamic financial services industry. It will set and disseminate standards and core principles as well as adapt existing international standards for supervision and regulation, consistent with the Sharia'a principles governing the industry. — (menareport.com)
© 2002 Mena Report (www.menareport.com )