KUWAIT CITY, May 5: The Islamic Financial Services Board (IFSB) successfully organised the IFSB’s 10th Public Lecture on Financial Policy and Stability on May 1, 2018 in Kuwait City, Kuwait, in conjunction with the IFSB Annual Meetings 2018.
The IFSB Annual Meetings 2018 is hosted by the Central Bank of Kuwait. The first lecture themed Financial Stability and Islamic Finance was delivered by Dr Monzer Kahf, Professor of Islamic Finance and Islamic Economics at the Hamad bin Khalifa University, Qatar. Dr Kahf shared the causes of financial instability namely; rise in interest rates, increase in uncertainties, balance sheet weaknesses, and regulatory inadequacies.
Dr Kahf also highlighted that the stability of Islamic finance is predominantly a result of it being based on real assets, and summarised elements in Islamic finance relating to financial stability such as, realism, sticking to real assets/goods, minimising speculation in currency and other markets, developmentalist approach, and inclusiveness.
Dr Kahf concluded his lecture by suggesting developments needed in the legal, regulatory and financial infrastructure of Islamic finance to further achieve its objectives of creating a just, inclusive and stable fi- nancial system. The second lecture on Islamic Finance Policies: Implications on Industry Stakeholders was delivered by H.E. Dr Ishrat Husain, Chairman of the Centre for Excellence in Islamic Finance of the Institute of Business Administration (IBA), Pakistan, and former Governor of the State Bank of Pakistan.
H.E. Dr Ishrat Husain shed light on the causes of the global financial crisis, highlighting the strengths of Islamic finance in using real assets versus paper-based, financially-engineered products commonly used in conventional banking. Dr Ishrat commented on the existing funding gap to achieve the United Nation’s Sustainable Development Goals (SDGs), drawing attention to the benefits of long-term investments in providing support during economic downturns .
H.E. Dr Ishrat focused on promoting long term investment through Islamic finance (mainly infrastructure finance) as well as financing for SME, agriculture and low cost housing. These initiatives will rise productivity, which will lead to higher income and rise in living standards of the economies embracing Islamic finance. H.E. Dr Ishrat concluded his lecture by sharing policy recommendations to take the industry to its next stage of development and reinforce the robustness of the industry in a more challenging and dynamic socio-economic and tech-oriented environment.
These recommendations included the strengthening of the financial system by developing a supportive legal, administrative, and regulatory environment, and improving the industry’s efficiency, and reducing its transaction costs, through the harmonisation and standardization of Shari’ah interpretations across countries. The IFSB Annual Meetings 2018 end today with the 32nd Meeting of the IFSB Council and 16th IFSB General Assembly.