Regulation and Supervision of Islamic Banks

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

No 2014/219, IMF Working Papers from International Monetary Fund

Abstract: 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 (search for similar items in EconPapers)
Pages: 33
Date: 2014-12-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

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