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Governor of the Central Bank of Kuwait: Islamic finance can support global financial stability

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Governor of the Central Bank of Kuwait: Islamic finance can support global financial stability


KUWAIT (Reuters)
said Mohammed Alhashl Governor of the Central Bank of Kuwait, the Islamic finance can contribute to greater financial stability and global economic growth, pointing out that the Islamic finance industry still faces many challenges. In an interview conducted with the website of the International Monetary Fund, he told Reuters received a copy of it on Tuesday Alhashl explained that these challenges sector focus on banks and other formulas of Islamic financial institutions account as it is still concentrated geographically in a few countries only. said Alhashl The size of the global Islamic finance sector exceeded $ 1.87 trillion, compared with $ 150 billion in the mid-nineties of the last century, saying that the Islamic finance's share of total global financial assets are still "small". He went on to say that the role of Islamic finance in the global financial system "is of particular importance." Experts say The sectors of the Islamic economy is the fastest growing in the world and expect to grow the Islamic finance industry to reach $ 2.58 trillion by 2020. Alhashl He stressed that the demand for financial products and services to approve the provisions of Islamic Sharia continues to increase, both at the level of individuals, institutions or for the purpose of infrastructure projects in Islamic countries and non-Muslim alike. He said that this led to the "entry of a large number of institutions in the field of Islamic finance for the first time some of them were traditional banks seeking to gain a stake in a promising market through Islamic windows operations." came Alhashl interview with website the International Monetary Fund before the day of the Islamic finance conference in Kuwait City with the participation of Christine Lagarde, director of the IMF and finance ministers and governors of central banks from several countries. It is scheduled that the conference will discuss various issues related to Islamic finance including increasing financial inclusion to stimulate the economy and improve the social life of those who did not reach them These services and ways to strengthen the supervision and control to promote financial stability in addition to the development of the sukuk market. He Alhashl that more than one-third of the world's population, or about 2.5 billion people do not have access to formal financial services. Alhashl believes that Islamic finance can help address this situation by encouraging small size of Islamic finance and the financing of small and medium-sized enterprises is small in size and Takaful insurance. He said that "improving financial inclusion requires increased access to basic banking services and the creation of supporting the control environment and raise the level of awareness among the public of financial matters." He cited Alhashl study an interview with the International Monetary Fund showed that the authors of the Islamic criteria, including the Islamic Financial Services Board may put the so-called "rules of the road" for the industry, however, these standards are not applied uniformly and consistently and there are fears that this difference may hinder the development of Islamic finance and then lead to the exposure to risk. He said Alhashl " There is an urgent need to continue to make efforts in order to adjust and improve regulatory frameworks for Islamic Financial Institutions in accordance with the recommendations of the Basel Committee on Banking Supervision and the Islamic Financial Services Board as well as to apply more harmonically. "On the instruments Alhashl said that the development of the sukuk market requires further amendments to the frameworks legal and regulatory frameworks of disclosure and strengthening the infrastructure, including the development of a secondary market for these instruments. Featuring instruments which is the Islamic version of the bonds potential to be eligible as assets liquid, high-quality and increasingly important to the legislative bodies for the purpose of application of liquidity regulatory standards and standard capital adequacy (Basel 3) issued by the Basel Committee . Alhashl He stressed that the Islamic finance conference could provide a forum for global dialogue looking at developing a vision for sustainable growth of the Islamic finance industry and contributes to create an atmosphere of continuous work in order to take advantage of the core competencies of Islamic finance. (press coverage Ahmed Hajjaji - Edit Nadia Aljowaily)

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