Regulating Islamic Financial Institutions: The Nature of the Regulated

By El-Hawary, Dahlia, Wafik Grais, Zamir Iqbal. 2004

191 citations recorded by the source corpus.

More than 200 Islamic financial institutions (IFIs) operate in 48 countries. Their combined assets exceed $200 billion, with an annual growth rate between 12 percent and 15 percent. The regulatory regime governing IFIs varies significantly across countries. A number of international organizations have been established with the mandate to set standards that would strengthen and harmonize prudential regulations as they apply to IFIs. The authors contribute to the discussion on the nature of prudential standards to be developed. They clarify the risks that IFIs are exposed to and the type of regulations that are needed to systematically manage them. They consider that the industry is still in a development process whose eventual outcome is the convergence of the practice of Islamic financial intermediation with its conceptual foundations. The authors contrast the risks and regulations needed in the case of Islamic financial intermediation operating according to core principles and current practice. They outline implications for approaches to capital adequacy, licensing requirements, and reliance on market discipline. They then propose an organization of the industry that would allow it to develop in compliance with its principles and prudent risk management, and facilitate its regulation.

Subfields: Accounting, Economics and Econometrics, Law

View Paper: https://www.semanticscholar.org/paper/d33f55305f0a681666e7de2b41be3831ffeb35fa

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Matteo Pellegrini
2. Wafik Grais
3. Humayon A. Dar
4. Ali Tariq
5. Assem Safieddine
6. Tomasz Korol
7. A. Wood

In Economics and Econometrics

1. Matteo Pellegrini
2. Wafik Grais
3. Humayon A. Dar
4. Ali Tariq
5. Assem Safieddine

In Law

1. Matteo Pellegrini
2. Wafik Grais

Citations in the corpus

• Risks of Sukuk structures: Implications for resource mobilization (2007, background): “Sukuk prospectuses are subject to the same fiduciary risks as Islamic banks (El-Hawary et al., 2004).”
• Corporate Governance in Institutions Offering Islamic Financial Services: Issues and Options (2006, methodology): “For an introduction to the principles and instruments of Islamic finance as well as regulatory arrangements applying to IIFS, refer for instance to El-Hawary, Grais, and Iqbal (2004).”
• Introducing Islamic Banks into Coventional Banking Systems (2007, unknown): “In fact, as already pointed out by Errico and Farrahbaksh (1998) and El-Hawary et al. (2004) among others, there are certain features of Islamic banks that warrant prudential regulation to a similar degree as traditional banks.”
• The Economics of Islamic Finance and Securitization (2007, unknown): “The General Council for Islamic Banking and Finance Institutions (GCIBFI) reports that roughly 200 Islamic financial institutions (IFIs) operating in 48 countries (El-Hawary et al., 2004) hold more than U.”