Regulation and Supervision of Islamic Banks

By Aledjandro Lopez Mejia, Suliman Aljabrin, Rachid Awad, Mohamed Norat, In W Song

December 12, 2014

Preview Citation

Format: Chicago

Aledjandro Lopez Mejia, Suliman Aljabrin, Rachid Awad, Mohamed Norat, and In W Song. Regulation and Supervision of Islamic Banks, (USA: International Monetary Fund, 2014) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Banking, Basel Core Principles, Credit risk, Deposit insurance, Financial regulation and supervision, Financial services, Islamic banking, Legal support in revenue administration, Revenue administration

Keywords: Bank, Banking supervision, Basel Core Principles, Conventional banks, Credit risk, Global, Governance structure, IB balance sheets, IB framework, IB presence, IB sector, IBS arise, IBS disclosure, IBS financing, IBS intermediation, IBS risk sharing, IBS shift, Islamic bank, Islamic banking, Islamic banks, Legal support in revenue administration, Regulation of Islamic banks, Regulatory framework, Risk sharing, Transparency risk, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/219
Stock No:

WPIEA2014219
ISBN:

9781498361590
ISSN:

1018-5941

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