51% of the Arab countries share in the Islamic banking finance industry globally – economic – the world today

0
93


A new study issued by the Arab Monetary Fund confirmed that the Arab countries are considered the most important centers of banking finance in compliance with the Sharia, as they account for nearly 51 per cent of the industry size worldwide according to the latest data issued by the Council of Islamic Financial Services while banks that are compatible with Sharia Of local and systemic importance in seven Arab countries.

The study, which was titled “Implementing Shari’a-compliant banks with the requirements of Basel III,” indicated that central banks and Arab monetary institutions were keen to keep abreast of international developments related to adopting the requirements of the Basel Committee for Banking Supervision “Basel III”, including those related to capital adequacy for Shariah-compliant banks. Some issue and / or apply these requirements.

The study indicated that Shariah-compliant banks face some challenges in fulfilling the capital requirements in the framework of the new requirements of Basel III .. And those challenges vary from one country to another, but they share some elements, including that Shariah-compliant banks are subject to the same regulatory instructions that are subject to It has traditional banks in a number of Arab countries with challenges related to insufficient financial instruments that are compatible with Sharia and that can be included within the components of capital, in addition to the challenges that are linked in accordance with international accounting standards.

The study indicated that the central banks and Arab monetary institutions are making unremitting efforts to overcome the challenges facing banks that are compatible with the Sharia and enable them to face the challenges related to the calculation of capital components in the framework of Basel III decisions and the harmonization of their products with the regulatory instructions, and work to complete the regulatory frameworks so that it can allow the issuance Tools that match Basel III courses and comply with Sharia guidelines.

On the other hand, the study indicated that the central banks and Arab monetary institutions seek to make parallel efforts to enable Shariah-compliant banks to calculate the three main types of risks, namely credit, market and operating risks.

She said: “Although the standards of the Basel Committee on Banking Supervision allow the use of a variety of approaches for each type of risk, the Shariah-compliant banks in the Arab countries tend to use the standard approaches and to a lesser degree the basic approaches that are the easiest possible ways to measure risk and there is no doubt that This is a long-term challenge, as the capabilities of these banks must be developed to adopt advanced approaches to risk measurement.

The study indicated that a limited number of Arab central banks calculate the credit gap for the purpose of using the capital margin tool to counter periodic fluctuations “Countercyclical Capital Buffer / CCyB /” .. The application of this requirement was an important role in reducing the levels of vulnerability of funding granted by Shariah-compliant banks Fluctuations in business cycles indicating the use of this margin is necessary according to what the global financial crisis 2008 showed, and its importance has increased in the context of the current conditions resulting from the pandemic of the emerging corona virus.

On the other hand, the study indicated that a number of central banks and Arab monetary institutions face challenges with respect to meeting the requirement of liquidity coverage ratio according to the requirements of Basel III, the most important of which is the lack of high-quality assets that are compatible with the Sharia in the same way as Sukuk according to the definition contained within the requirements of Basel .. In order to overcome the challenges mentioned above, a number of central banks issued financial papers compatible with Islamic law.

While the central banks and Arab monetary institutions, in cooperation with the concerned authorities in a number of Arab countries, made efforts to develop a stock market compatible with Sharia.

With regard to the second pillar of Basel III, the study showed that banks that comply with Sharia follow the same regulatory instructions for traditional banks in this regard in a number of Arab countries .. While central banks in some Arab countries have directed to issue instructions that take into account the privacy of banks that comply with Sharia with regard to Partial stress tests, while the central banks in other countries work to complete the issuance of this framework, and with that there is a supervisory authority specialized in supervising Shariah-compliant banks in a number of Arab countries.

With regard to the third pillar of Basel III, banks that comply with Sharia in the Arab countries adopt standards of disclosure and transparency in the framework of good governance that suits their business and activities in accordance with the developments surrounding them through the commitment to provide accurate, reliable and updated information to shareholders in accordance with the regulatory and legislative requirements within a transparent framework in A number of Arab central banks have been issuing the regulatory framework for market discipline regulating the process of financial / non-financial and regulatory disclosures that includes all important data related to them and their financial operations and performance in general / which often depend on the same framework applied to traditional banks.

Print
Email








LEAVE A REPLY

Please enter your comment!
Please enter your name here