Islamic Banking Regulations in Light of Basel II

This paper seeks to determine whether the existing regulatory standards and supervisory framework are adequate to ensure the viability, strength, and continued expansion of Islamic financial institutions. The reemergence of Islamic banking and the attention given to it by regulators around the glob...

Descripción completa

Guardado en:

Detalles Bibliográficos
Autores principales:	M. Kabir Hassan, Muhammad Abdul Mannan Chowdhury
Formato:	article
Lenguaje:	EN
Publicado:	International Institute of Islamic Thought 2010
Materias:	Islam BP1-253
Acceso en línea:	https://doaj.org/article/75fecd14e159437a9ba65bcec8e8ee67
Etiquetas:	Agregar Etiqueta Sin Etiquetas, Sea el primero en etiquetar este registro!

id	oai:doaj.org-article:75fecd14e159437a9ba65bcec8e8ee67
record_format	dspace
spelling	oai:doaj.org-article:75fecd14e159437a9ba65bcec8e8ee672021-12-02T19:41:16ZIslamic Banking Regulations in Light of Basel II10.35632/ajis.v27i1.3572690-37332690-3741https://doaj.org/article/75fecd14e159437a9ba65bcec8e8ee672010-01-01T00:00:00Zhttps://www.ajis.org/index.php/ajiss/article/view/357https://doaj.org/toc/2690-3733https://doaj.org/toc/2690-3741 This paper seeks to determine whether the existing regulatory standards and supervisory framework are adequate to ensure the viability, strength, and continued expansion of Islamic financial institutions. The reemergence of Islamic banking and the attention given to it by regulators around the globe as to the implications of a recently issued Basel II banking regulation makes this article timely. The Basel II framework, which is based on minimum capital requirements, a supervisory review process, and the effective use of market discipline, aligns capital adequacy with banking risks and provides an incentive for financial institutions to enhance risk management and their system of internal controls. Like conventional banks, Islamic banks operate under different regulatory regimes. The still diverse views held by the regulatory agencies of different countries on Islamic banking and finance operations make it harder to assess the overall performance of international Islamic banks. In light of the increased financial innovation and diversity of instruments offered in Islamic finance, the need to improve the transparency of bank operations is particularly relevant for Islamic banks. While product diversity is important in maintaining their competitiveness, it also requires increased transparency and disclosure to improve the understanding of markets and regulatory agencies. The governance of Islamic banks is made even more complex by the need for these banks to meet a set of ethical and financial standards defined by the Shari`ah and the nature of the financial contracts banks use to mobilize deposits. Effective transparency in this area will greatly enhance their credibility and reinforce their depositors and investors’ level of confidence. M. Kabir HassanMuhammad Abdul Mannan ChowdhuryInternational Institute of Islamic ThoughtarticleIslamBP1-253ENAmerican Journal of Islam and Society, Vol 27, Iss 1 (2010)
institution	DOAJ
collection	DOAJ
language	EN
topic	Islam BP1-253
spellingShingle	Islam BP1-253 M. Kabir Hassan Muhammad Abdul Mannan Chowdhury Islamic Banking Regulations in Light of Basel II
description	This paper seeks to determine whether the existing regulatory standards and supervisory framework are adequate to ensure the viability, strength, and continued expansion of Islamic financial institutions. The reemergence of Islamic banking and the attention given to it by regulators around the globe as to the implications of a recently issued Basel II banking regulation makes this article timely. The Basel II framework, which is based on minimum capital requirements, a supervisory review process, and the effective use of market discipline, aligns capital adequacy with banking risks and provides an incentive for financial institutions to enhance risk management and their system of internal controls. Like conventional banks, Islamic banks operate under different regulatory regimes. The still diverse views held by the regulatory agencies of different countries on Islamic banking and finance operations make it harder to assess the overall performance of international Islamic banks. In light of the increased financial innovation and diversity of instruments offered in Islamic finance, the need to improve the transparency of bank operations is particularly relevant for Islamic banks. While product diversity is important in maintaining their competitiveness, it also requires increased transparency and disclosure to improve the understanding of markets and regulatory agencies. The governance of Islamic banks is made even more complex by the need for these banks to meet a set of ethical and financial standards defined by the Shari`ah and the nature of the financial contracts banks use to mobilize deposits. Effective transparency in this area will greatly enhance their credibility and reinforce their depositors and investors’ level of confidence.
format	article
author	M. Kabir Hassan Muhammad Abdul Mannan Chowdhury
author_facet	M. Kabir Hassan Muhammad Abdul Mannan Chowdhury
author_sort	M. Kabir Hassan
title	Islamic Banking Regulations in Light of Basel II
title_short	Islamic Banking Regulations in Light of Basel II
title_full	Islamic Banking Regulations in Light of Basel II
title_fullStr	Islamic Banking Regulations in Light of Basel II
title_full_unstemmed	Islamic Banking Regulations in Light of Basel II
title_sort	islamic banking regulations in light of basel ii
publisher	International Institute of Islamic Thought
publishDate	2010
url	https://doaj.org/article/75fecd14e159437a9ba65bcec8e8ee67
work_keys_str_mv	AT mkabirhassan islamicbankingregulationsinlightofbaselii AT muhammadabdulmannanchowdhury islamicbankingregulationsinlightofbaselii
_version_	1718376209275944960

Islamic Banking Regulations in Light of Basel II

Ejemplares similares