An Introduction to Islamic Finance: Theory and Practice

294 AN INTRODUCTION TO ISLAMIC FINANCE in compliance with the Shari’ah and take any necessary actions to avoid any non - complia ...

Risk Management 295 It is critical that investors know who owns the underlying or securitized assets in a particular sukuk becau ...

296 AN INTRODUCTION TO ISLAMIC FINANCE Quantitative Methods of Risk Measurement Risk assessment and measurement is an art as wel ...

Risk Management 297 commercial risk. The correlation between the PER and the asset’s return could, therefore, be an indicator of ...

298 AN INTRODUCTION TO ISLAMIC FINANCE ■ (^) Effective risk management will assist IFIs to integrate with global fi nan- cial ma ...

299 CHAPTER 14 Regulation of Islamic Financial Institutions Financial Institutions INTRODUCTION Firms in the fi nancial services ...

300 AN INTRODUCTION TO ISLAMIC FINANCE Mitigation of Systemic Risk Another rationale for regulation, linked to the notion of pub ...

Regulation of Islamic Financial Institutions 301 In contrast, the promotion of economic development may be beyond the role that ...

302 AN INTRODUCTION TO ISLAMIC FINANCE principle, which is different to the intermediation relationship between depositors and c ...

Regulation of Islamic Financial Institutions 303 banking and securities operations. Differences in commercial and invest- ment b ...

304 AN INTRODUCTION TO ISLAMIC FINANCE services. They would take demand deposits as part of these services. The PLS intermediati ...

Regulation of Islamic Financial Institutions 305 nature of a fi nancial intermediary such as a bank is such that its capital - t ...

306 AN INTRODUCTION TO ISLAMIC FINANCE may not apply. Two main features of Islamic banks were highlighted: the nature of interme ...

Regulation of Islamic Financial Institutions 307 the calculation of risk weights for the assets of Islamic banks differs from th ...

308 AN INTRODUCTION TO ISLAMIC FINANCE The IFSB standard requires that an IFI maintain a minimum capital of 8 percent of the tot ...

Regulation of Islamic Financial Institutions 309 Determining Risk Weights: An Example Risk weights are assigned depending on the ...

310 AN INTRODUCTION TO ISLAMIC FINANCE reserves maintained by IFIs to minimize commercial displaced, withdrawal and systemic ris ...

Regulation of Islamic Financial Institutions 311 BANK SUPERVISION AND MARKET DISCIPLINE Basel I was an early attempt to defi ne ...

312 AN INTRODUCTION TO ISLAMIC FINANCE The disclosure practices of IFIs are highly varied. Although the AAOIFI Financial Account ...

Regulation of Islamic Financial Institutions 313 exposure to displacement or withdrawal risks. Diversifi cation on the asset sid ...