• Home
• /
• Business

Need to regulate Islamic finance industry stressed

DUBAI There is a need for a regulatory framework to effectively support and regulate the Islamic finance industry, which has made a mark for itself in the global financial markets.

Dr Mohammed Khalfan Bin Khirbash, UAE's minister of state for finance and industry and chairman, Dubai Islamic Bank, who yesterday inaugurated the International Islamic Finance Forum in Dubai, called for an effective regulatory framework for the industry.

Dr Khirbash said:"Islamic finance must focus on effective regulation. Standards must become the norm, not isolated initiatives. Innovation has to be a genuine response to investor demand."

In his key note address, to 300 delegates from 25 countries at the Crowne Plaza hotel, Dr Khirbash said Islamic financiers must learn from the mistakes of conventional investment markets if they are to expand and strengthen Islamic finance's role worldwide.

Islamic finance must focus on effective regulation. Standards must become the norm, not isolated initiatives. Innovation has to be a genuine response to investor demand, he pointed out.

He also said that in the post September 11 world, the changing dynamics shaping the world's financial markets are creating opportunities for Islamic finance to become an important global monetary instrument.

He added:" Slowly we are learning that hard engineered finance is not necessarily sound business. In a world that calls for socially responsible investment, Islamic finance comes into its own. Never before has the industry had such an opportunity to prove its added value. If the Islamic finance industry is to embrace the new mind set of the global financial industry, it must respond to the underlying needs of the investors that created it. But equally important, Islamic financiers must combine their efforts and push for industry wide growth."

Organised by Institute for International Research (IIR), the three-day International Islamic Finance Forum is addressing key challenges faced by the Islamic finance sector valued at over $230 billion and which is predicted to maintain double digit growth for the next 15-20 years.

Among issues being discussed are: the international regulatory environment and how it affects Islamic finance; Muslim country stock exchanges and Islamic financial centres; the pros and cons of Islamic hedge fund plans; wealth management post 9/11; new Islamic indexes, funds and sukuk market and international moves in the Islamic mortgage market.

Chris Mullinger, IIR's conference director, said that with the impending crisis in Iraq, there will also be a special address on the consequences and impact for regional economies.

He said: "By bringing together senior executives from the global Islamic finance industry, and with its searching panel sessions, cases studies and lively debates, the forum provides a unique opportunity for networking and to promote industry wide initiatives."