IFSB Releases the 2019 Stability Report on Islamic Financial Services
IFSB issued the seventh edition of the financial stability report on the Islamic financial services industry. The report examines the implications, for the global Islamic financial services industry, of recent economic developments and changes in the global regulatory and supervisory frameworks. The report tracks developments and trends and examines the resilience of the three sectors of the Islamic financial services industry—Islamic banking, Islamic capital market, and Islamic insurance (takāful). For the analysis of the Islamic banking sector, the report utilizes data from the Prudential and Structural Islamic Financial Indicators (PSIFIs) database of IFSB.
The report tracks initiatives and developments in other international financial standard-setting bodies with emphasis on aspects that directly relate to the complementary role played by IFSB. Various initiatives of IFSB since the last report have also been highlighted, including a synopsis of the IFSB standards implementation survey, standards development, research and working papers, and various industry collaborations. The report covers emerging issues in the Islamic financial services industry, with a focus on the regulatory and supervisory concerns arising from the developments in blockchain technology. Included in the report are article contributions from the Central Bank of Kuwait, the Central Bank of Nigeria, and the Astana International Financial Center on the developments and prospects for the Islamic financial services industry in their respective jurisdictions. The key highlights of the report include the following:
- The Islamic banking sector retained its dominance in the global Islamic financial services industry. Out of the the 36 jurisdictions covered in the 2019 report, the domestic market share for Islamic banking in relation to the total banking sector continued to increase in at least 19 countries, remained constant in six, and declined in 11 jurisdictions.
- The performance of the Islamic banking sector grew by a mere 0.9% in 2018, compared to 4.3% in 2017. As at the second quarter of 2018, the sector accounted for 72% (76% in 2017) of the total value of assets of the Islamic financial services industry; this is mainly due to the depreciation of local currencies in terms of USD, especially in some emerging economies with a significant Islamic banking presence.
- The Islamic capital market sector, at end of 2018, accounted for 27% assets of the global Islamic financial services industry; this is supported by a positive performance due to the sovereign and multilateral ṣukūk issuances in key Islamic finance markets to support respective budgetary expenditures as well as a number of market debuts of sovereign issuance, including green sovereign ṣukūk to finance eco-friendly environment projects.
- The share of global takāful industry in the global Islamic financial services industry remained unchanged at 1.3%. Global takāful contributions grew by 4.3% (y-o-y and in nominal terms) in 2017, with a six-year (2012–17) compound average growth rate of almost 6.9%. At the end 2017, an estimated 306 takāful institutions, including retakāful and takāful windows, now offer takāful products in at least 45 countries.
Related Links
Keywords: International, Banking, Insurance, Securities, Financial Stability Report, Islamic Financial Services Industry, Islamic Banking, Financial Stability, IFSB
Previous Article
ESMA Publishes Annual Report for 2018 and Work Program for 2019Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.