IFSB Publishes FAQs on Islamic Finance Standards
The Islamic Financial Services Board (IFSB) published a set of frequently asked questions (FAQs) that provide additional guidance on four IFSB standards. These standards are IFSB-12 on guiding principles on liquidity risk management for institutions offering Islamic financial services, IFSB-13 on guiding principles on stress testing for institutions offering Islamic financial services, IFSB-24 on guiding principles for investor protection in Islamic capital markets, and IFSB-25 on disclosures to promote transparency and market discipline for takāful/retakāful undertakings. The new set of FAQs offers clarifications and explanative directions on the issued standards.
The FAQs for IFSB-12 give explanation and guide about the main principles in the effective management of liquidity risk in institutions offering Islamic financial services. These include identification and measuring liquidity risk and the role of the top management and supervisors of an institution. The questions also address the key factors in controlling and mitigating liquidity risk and how to report and disclose this risk. In addition, the FAQs provide clarifications related to liquidity risk management at the consolidated level, along with the home-host and cross-sector supervision for liquidity risk. The FAQs for IFSB-13 include responses to questions raised about IFSB-13, including questions regarding the differences between scenario analysis and sensitivity tests, the role of Supervisory Sharīʻah Board in stress testing framework, stress testing related to capital planning, and model and parameter risks posed by using models for stress testing.
Related Links
Keywords: International, Banking, Insurance, Securities, FAQ, Islamic Finance, Liquidity Risk, Stress Testing, Regulatory Capital, IFSB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Metin Epözdemir
Metin Epözdemir helps European and African banks with design and implementation of credit risk, stress testing, capital management, and credit loss accounting solutions.
Previous Article
CNB Assesses Financial Stability and Sets CCyB Rate at 2.5%Related Articles
APRA Publishes Results of Climate Risk Self-Assessment Survey
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
ACPR Publishes Updates Related to CRD IV and Covered Bonds
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
EIOPA Publishes Guidance on Climate Change Scenarios in ORSA
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
EBA and ECB Respond to Proposals on Sustainability Disclosures
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
EBA Publishes Multiple Regulatory Updates for Regulated Entities
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
EESC Opines on Proposals on CRR and European Single Access Point
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury Publishes Multiple Regulatory Updates in July 2022
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.
