IFSB Releases the 2018 Stability Report on Islamic Financial Services
IFSB released the sixth edition of the Islamic Financial Services Industry (IFSI) Stability Report in 2018. The report provides an assessment of key developments and illuminates the status of resilience of various sectors of the global Islamic finance services industry—including Islamic banking, takāful, ṣukūk, Islamic funds, and equity markets—while highlighting current and emerging challenges to its stability. To analyze the Islamic banking sector, the report utilizes data from the Prudential and Structural Islamic Financial Indicators (PSIFIs) database of IFSB.
The report first provides an overview of the global IFSI, including updates on trends, growth, and developments in the three main sectors of the industry: Islamic banking, Islamic capital markets, and takāful. It then describes the initiatives undertaken by international standard-setting bodies to further ensure the stability of the financial institutions and markets and examines the implications of such reforms. Next, the report assesses the resilience of the Islamic financial system, which includes technical analysis of selected indicators as well as assessment of risks, vulnerabilities, and stability issues in the three main sectors of the industry. Finally, the report covers emerging issues in Islamic finance and conducts a comprehensive analysis into the diversity of the legal infrastructure and Sharīʿah governance frameworks as applied in various jurisdictions. The following are the key highlights of the analysis:
- The growth of the industry in 2017 was actively driven by all three sectors of the industry, with a significant contribution by the performance of the Islamic capital markets boosted by ṣukūk issuances from sovereign and multilateral institutions.
- Improvements were seen in profitability and asset quality of the global Islamic banking sector, with Return on Assets and Return on Equity at their best levels in the last five years and the broader industry non-performing financing continuing to improve.
- Liquidity conditions have continued to deteriorate, although there is heterogeneity in this trend between countries.
- While Islamic capital markets marked a strong performance in 2017 on the back of sovereign ṣukūk issuances, some underlying weaknesses persisted from the previous year, including those in the corporate ṣukūk market.
- The takāful sector, given its nascent size, continues to face challenges in the operating environment as a result of stiff competition from larger and more established insurance companies.
Related Links
Keywords: International, Banking, Insurance, Securities, IFSI, Financial Stability Report, Islamic Finance, ISFB
Related Insights
|
News
BCBS Finds Liquidity Risk Management Principles Remain Fit for PurposeBCBS completed a review of its 2008 Principles for sound liquidity risk management and supervision. The review confirmed that the principles remain fit for purpose.
January 17, 2019
WebPage
Regulatory News
|
|
News
MAS Guidelines on Risk Mitigation Requirements for OTC DerivativesMAS published guidelines on risk mitigation requirements for non-centrally cleared over-the-counter (OTC) derivatives contracts.
January 17, 2019
WebPage
Regulatory News
|
|
News
HKMA Urges Local Banks to Start Working on FRTB ImplementationHKMA announced that it plans to issue a consultation paper on the new market risk standard in the second quarter of 2019.
January 17, 2019
WebPage
Regulatory News
|
|
News
EBA Finalizes Guidelines for High-Risk Exposures Under CRREBA published the final guidelines on the specification of types of exposures to be associated with high risk under the Capital Requirements Regulation (CRR). The guidelines are intended to facilitate a higher degree of comparability in terms of the current practices in identifying high-risk exposures.
January 17, 2019
WebPage
Regulatory News
|
|
News
BoE Publishes the Schedule for Statistical Reporting for 2019BoE published the updated schedule for statistical reporting for 2019. The reporting institutions use the online statistical data application (OSCA) to submit statistical data to BoE.
January 16, 2019
WebPage
Regulatory News
|
|
News
PRA Delays Final Direction on Reporting of Private SecuritizationsPRA and FCA have delayed the issuance of final direction, including the final template, on reporting of private securitizations, from January 15, 2019 to the end of January 2019.
January 15, 2019
WebPage
Regulatory News
|
|
News
SNB Updates Forms on Supervisory Reporting for BanksSNB published Version 1.7 of reporting forms (AUR_U, AUR_UEA, AUR_UES, AURH_U, AUR_K, AUR_KEA, and AURH_K) and the related documentation for supervisory reporting on an individual and consolidated basis.
January 15, 2019
WebPage
Regulatory News
|
|
News
BCBS Finalizes Market Risk Capital Framework and Work Program for 2019BCBS published the final framework for market risk capital requirements and its work program for 2019. Also published was an explanatory note to provide a non-technical description of the overall market risk framework, the changes that have been incorporated into in this version of the framework and impact of the framework.
January 14, 2019
WebPage
Regulatory News
|
|
News
EBA Single Rulebook Q&A: First Update for January 2019EBA published answers to 13 questions under the Single Rulebook question and answer (Q&A) updates for this week.
January 11, 2019
WebPage
Regulatory News
|
|
News
PRA Proposes to Amend Supervisory Statement on Credit Risk MitigationPRA published the consultation paper CP1/19 that is proposing changes to the supervisory statement (SS17/13) on credit risk mitigation.
January 10, 2019
WebPage
Regulatory News
|
