basel iii and islamic finance - islamic banking · iqbal teaches islamic accounting, banking,...
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About the LectureThe challenges facing Islamic Financial institutions in complying with BASEL III will be outlined. In addition, it is intended to review this emerging regulatory environment for global banking and see if key Islamic Finance inspired instruments like risk sharing Sukuks can play a greater role in the mainstream conventional markets as well.
The Global Financial Crisis (GFC) of 2008-2009 nearly led to the meltdown of conventional banking. It was only saved by unprecedented market interventions and liquidity injections by central banks. The cost to the taxpayers of this bail out was enormous and still weighs down on global economic growth prospects.
One consequence of this massive failure of the conventional banking system was to usher in more regulations to ensure that taxpayer funded bailouts do not become the norm. The focus of these new regulatory changes has been on requiring more “skin in the game” on the part of the capital providers of the banking industry. From more equity to more loss absorbing non-equity has been the main thrust of regulations like BASEL III. The quality of non-equity capital has also been tightened. In additionstringent liquidity cushions have also been mandated. Risk sharing, rather than risk transfer is now needed for Tier 1 Capital under BASEL III.
The growing Islamic Finance sector has not been immune from these changes. The regulators in countries offering Islamic banking have also started to implement BASEL III. In general, the capital cushions of Islamic banks have been found to be adequate, but much work needs to be done in ensuring the availability of appropriate liquidity instruments. However, the more interesting development has been the re-configuring Sukuk issuances to be “loss absorbing” and thus eligible for Tier 1 Capital under Basel III. This actually, brings out the original intended risk sharing feature of Sukuks as opposed to the almost bond-type risk transfer issuances which have been witnessed in the market prior to the GFC.
About the SpeakerIqbal is a trained economist and accountant. In his early career He worked as an Investment Analyst in the City of London for several years. In recent years he is largely involved in teaching post graduate courses in Islamic economics, finance, banking and insurance at a number of leading business schools in the UK and overseas.
Iqbal has advised many banks and insurance companies in the UK on their launch of Islamic financial services. He is also a consultant to a number of institutions on structuring and marketing Islamic financial products in the UK. He is now a Special Advisor on Business and Economic Affairs to the Secretary General of the Muslim Council of Britain. In this capacity, he was a member of the Governor of the Bank of England’s working party set up to facilitate the introduction of Shariah compliant financial products in the UK market.
Iqbal teaches Islamic Accounting, Banking, Economics, Finance and Insurance courses for Bangor Business School, CASS Business School, CASS Business School EMBA programme in Dubai and the University of East London. He is a contributing tutor to Durham University’s Summer School on Islamic Finance.
Iqbal is also associate with Afka Consulting Ltd (ACL) that organises the premier annual International Takaful Summit in London which attracts over 400 participants and providers from the global Takaful (Islamic Insurance) Industry. Iqbal was the convenor and lead at The tenth International Takaful Summit held in London from 22-24 February 2016.
Iqbal was awarded the CBE in the 2005 Queen’s Honours List for services to international development.
BASEL III and Islamic FinanceChallenges and Opportunities
Date: Wednesday, 16th March 2016 Time: 6.15pm
Speaker:Prof Mohamed Iqbal AsariaAdjunct Professor of Islamic Finance, INCEIF, MalaysiaVisiting Faculty in Islamic Finance, CASS Business School, London
www.islamic-banking.com
Help ye one another in righteousness and piety
The Holy Qu’ran 5:2
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Venue:EY1 More London Place, LondonGreater London, SE1 2AF (MAP)