{
  "title": "Islamic Financial Institutions and Products in the Global Financial System: Key Issues in Risk Management and Challenges Ahead",
  "publication": "IMF Working Papers, November 1, 2002",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/islamic-financial-institutions-and-products-in-the-global-financial-system-key-issues-in-16109",
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  "summary": "The provision and use of financial services and products that conform to Islamic religious principles pose special challenges for the identification, measurement, monitoring, and control of underlying risks.",
  "sections": [
    {
      "heading": "Executive summary",
      "content": "- The provision and use of financial services and products that conform to Islamic religious principles pose special challenges for the identification, measurement, monitoring, and control of underlying risks.\n- Effective and efficient risk management in Islamic financial institutions has assumed particular importance as they endeavor to cope with the challenges of globalization.\n- Addressing these challenges requires the development of a more suitable regulatory framework, new financial instruments, and institutional arrangements to provide an enabling operational environment for Islamic finance.\n- The recent establishment of the Islamic Financial Services Board, facilitated by the IMF, addresses these needs."
    },
    {
      "heading": "Key findings and challenges",
      "content": "- Special risk-management challenges arise from Islamic religious principles governing permitted financial services and products.\n- Identification, measurement, monitoring, and control of underlying risks are more complex in Islamic financial institutions compared with conventional counterparts.\n- Globalization increases the importance and urgency of improved risk management in Islamic finance.\n- Institutional and market infrastructure gaps constrain effective risk management and product development."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Develop a more suitable regulatory framework tailored to the specific features of Islamic financial institutions and products.\n- Create new financial instruments compatible with Islamic principles to enable better risk-sharing and risk-transfer mechanisms.\n- Establish and strengthen institutional arrangements that provide an enabling operational environment for Islamic finance.\n- Support standard-setting and coordination efforts, exemplified by facilitation of the Islamic Financial Services Board."
    },
    {
      "heading": "Institutional response",
      "content": "- The establishment of the Islamic Financial Services Board, facilitated by the IMF, is identified as a response to needs for standard setting and coordination in Islamic finance.\n\n---\n\n Content in this bundle\n\n- wp02192\n  - wp02192 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp02192 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/islamic-financial-institutions-and-products-in-the-global-financial-system-key-issues-in-16109"
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    "Published: November 1, 2002",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451859775.001",
    "The provision and use of financial services and products that conform to Islamic religious principles pose special challenges for the identification, measurement, monitoring, and control of underlying risks.",
    "Effective and efficient risk management in Islamic financial institutions has assumed particular importance as they endeavor to cope with the challenges of globalization.",
    "Addressing these challenges requires the development of a more suitable regulatory framework, new financial instruments, and institutional arrangements to provide an enabling operational environment for Islamic finance.",
    "The recent establishment of the Islamic Financial Services Board, facilitated by the IMF, addresses these needs.",
    "Special risk-management challenges arise from Islamic religious principles governing permitted financial services and products.",
    "Identification, measurement, monitoring, and control of underlying risks are more complex in Islamic financial institutions compared with conventional counterparts.",
    "Globalization increases the importance and urgency of improved risk management in Islamic finance.",
    "Institutional and market infrastructure gaps constrain effective risk management and product development.",
    "Develop a more suitable regulatory framework tailored to the specific features of Islamic financial institutions and products.",
    "Create new financial instruments compatible with Islamic principles to enable better risk-sharing and risk-transfer mechanisms.",
    "Establish and strengthen institutional arrangements that provide an enabling operational environment for Islamic finance.",
    "Support standard-setting and coordination efforts, exemplified by facilitation of the Islamic Financial Services Board.",
    "The establishment of the Islamic Financial Services Board, facilitated by the IMF, is identified as a response to needs for standard setting and coordination in Islamic finance.",
    "**_wp02192**"
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