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Business and Economics > Public Finance

You are looking at 1 - 9 of 9 items for :

  • Type: Journal Issue x
  • Other Economic Systems: Public Economics; Financial Economics x
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Cover Policy Papers
Ensuring Financial Stability in Countries with Islamic Banking
International Monetary Fund
This paper discusses the need for ensuring financial stability in countries with Islamic Banking (IB). IB continues to grow rapidly, in size and complexity, posing a challenge to supervisory authorities and central banks. The legal environment within which IBs operate can be complex and challenging and may have implications for financial stability. IBs operate in diverse legal environments, some of which are more evolved than others in providing strong legal underpinnings for IB. International governance standards apply to IB but need to be customized to consider IBs’ distinct governance features. Significant progress has been achieved in developing prudential standards for IB, although broader implementation and more consistent application are needed. Progress has been slow in developing IB’s liquidity management and money markets. In recent years, hybrid financial products in IB have emerged that replicate aspects of conventional finance in an IB context, raising financial stability concerns. The IMF has played an important role in promoting financial stability in IB jurisdictions, working closely with IB standard setters, and international organization to shape IB standards and promote best practices.
Keywords:
PP; IB jurisdiction; balance sheet; IB industry; IB operation; IB practice; IB product; IB service; IB depositor; IB activity; IB products; IB governance; IBS stability; Islamic banking; Legal support in revenue administration; Deposit insurance; Capital adequacy requirements; Global; Middle East; East Asia; Central Asia; Sub-Saharan Africa
Cover IMF Working Papers
Resolution Frameworks for Islamic Banks
Elsie Addo Awadzi
,
Carine Chartouni
, and
Mario Tamez
Islamic banking is growing rapidly and its potential impact on global financial stability cannot be underestimated. International standards for resolving banks have evolved after the global financial crisis, culminating in the Financial Stability Board’s (“FSB”) Key Attributes of Effective Resolution Regimes for Financial Institutions. This paper examines the applicability of the Key Attributes to the resolution of Islamic banks. It concludes that a number of issues would need to be addressed, owing to Islamic banks’ unique governance structures and balance sheets. It recommends international guidance for the design of robust Shari`ah -compliant resolution frameworks for jurisdictions with Islamic banks.
Keywords:
WP; Islamic bank; resolution framework; account holder; resolution authority; balance sheet; Islamic banks; Islamic bank resolution; bank resolution; RRPs help resolution authorities; originating bank; bank management; asset portfolio; Islamic banking; Bank resolution framework; Legal support in revenue administration; Special purpose vehicle; Global
Cover IMF Working Papers
Islamic Finance, Consumer Protection, and Financial Stability
Ms. Inutu Lukonga
Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.
Keywords:
WP; consumer vulnerability; banking sector; central bank; investor confidence; Shari'ah-complaint Sukuk; Islamic Finance; Consumer Protection; Financial Stability; Sukuk holder; protection of Sukuk investor; investor protection; Shar'iah principle; liquidation process Sukuk; investor right; asset-backed Sukuk; consumer awareness; Islamic banking; Legal support in revenue administration; Deposit insurance; Global
Cover IMF Working Papers
Regulation and Supervision of Islamic Banks
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.
Keywords:
WP; Islamic bank; bank; IB balance sheets; governance structure; IB sector; Islamic banks; conventional banks; regulatory framework; banking supervision; transparency risk; IBS intermediation; IBS disclosure; risk sharing; IBS shift; IBS arise; IBS risk sharing; IBS financing; IB framework; regulation of Islamic banks; Islamic banking; Legal support in revenue administration; Basel Core Principles; Credit risk; Global; IB presence
Cover IMF Working Papers
Islamic Banking Regulation and Supervision: Survey Results and Challenges
Mr. In W Song
and
Carel Oosthuizen
The growing presence of Islamic banking needs to be accompanied by the development of effective regulation and supervision. This paper examines the results of the survey conducted by the International Monetary Fund to document international experiences and country practices related to legal and prudential frameworks governing Islamic banking activities. Although a number of countries have made considerable progress in creating legal, regulatory, and supervisory frameworks that accommodate Islamic banking, there are substantial differences. This paper also identifies a number of challenges faced by regulatory and supervisory agencies regarding Islamic banking.
Keywords:
WP; bank; Shariah compliance; conventional bank; supervisory authority; Banking supervision; Islamic banks; regulatory framework; internal auditor; Shariah compliance officer; bank distress resolution framework; banking product; bank resolution; Islamic banking; Capital adequacy requirements; Islamic banking supervision; Legal support in revenue administration; Market risk; Africa; Global; Sub-Saharan Africa; Europe; Asia and Pacific
Cover IMF Working Papers
The Economics of Islamic Finance and Securitization
Andreas Jobst
Islamic lending transactions are governed by the precepts of the shariah, which bans interest and stipulates that income must be derived as return from entrepreneurial investment. Since Islamic finance is predicated on asset backing and specific credit participation in identified business risk, structuring shariah-compliant securitization seems straightforward. This paper explains the fundamental legal principles of Islamic finance, which includes the presentation of a valuation model that helps distil the essential economic characteristics of shariah-compliant synthetication of conventional finance. In addition to a brief review of the current state of market development, the examination of pertinent legal and economic implications of shariah compliance on the configuration of securitization transactions informs a discussion of the most salient benefits and drawbacks of Islamic securitization.
Keywords:
WP; Islamic law; capital market; reserve account; present value
Cover IMF Working Papers
Reforming External Tariffs in Central and Western African Countries
Mr. Lubin Kobla Doe
This paper examines the reform of the external tariff initiated by the CEMAC and the WAEMU that is aimed at reinforcing their economic integration. Overall, there is broad compliance with the streamlined and moderate rates, but with significant deviations from the harmonized paths in several countries. WAMZ countries, except Ghana, need to undertake major reforms in order to align their external tariff structures with that of the WAEMU as planned for 2007. To promote full compliance with the harmonized external tariff policies, the paper suggests, measures need to be taken, including the creation of financial incentives, at the regional and country levels.
Keywords:
WP; CEMAC; customs duty; WAEMU country; WAEMU tax reform; WAEMU tariff reform; Tax policy; Harmonization; Import tariffs; WAEMU; WAMZ; Central Africa; West Africa; tax competition; CEMAC country; import tariff structure; CEMAC model; Tariffs; Imports; Duties; Tax harmonization
Cover IMF Working Papers
Harmonization of Domestic Consumption Taxes in Central and Western African Countries
Mr. Lubin Kobla Doe
This paper examines the reform of the main domestic consumption taxes initiated by the CEMAC and the WAEMU aimed at reinforcing their economic integration. On the whole, compliance with the VAT is relatively weaker in the CEMAC than in the WAEMU. The opposite applies for excises. Major reforms would need to be undertaken by WAMZ countries, except Ghana and, to a lesser extent, Nigeria in order to align their tax structure with that of the WAEMU as planned for 2007.
Keywords:
WP; ad valorem tax; tax; excise; rate; CEMAC; Tax policy; Harmonization; Consumption taxes; WAEMU; WAMZ; Central Africa; West Africa; CEMAC VAT base; creditors vis-à-vis; WAEMU rate policy; WAEMU regime; rate neutrality; CEMAC country; WAEMU VAT; tax exemption; rate policy; WAEMU directive state; VAT directive; VAT due; Value-added tax; Excises; Consumption
Cover Islamic Banking
Islamic Banking
Mr. Abbas Mirakhor
and
Mr. Zubair Iqbal

Abstract

This study was prepared by Zubair Iqbal of the Middle Eastern Department and Abbas Mirakhor of the Research Department. To collect information and views for the study, the authors held discussions with the authorities and representatives of commercial banks in the Islamic Republic of Iran and in Pakistan.

Keywords:
OP; rate of return; bank; quote; asset portfolio; financing; economic system; investment deposit; deposit instrument; bank-client relationship; Commercial banks; Islamic banking; Credit; Income; Loans; Bank credit