Islamic Finance: Opportunities, Challenges, and Policy Options

By Alfred Kammer, Mohamed Norat, Marco A. Piñón-Farah, Ananthakrishnan Prasad, Christopher M Towe, Zeine Zeidane

April 6, 2015

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Alfred Kammer, Mohamed Norat, Marco A. Piñón-Farah, Ananthakrishnan Prasad, Christopher M Towe, and Zeine Zeidane. Islamic Finance: Opportunities, Challenges, and Policy Options, (USA: International Monetary Fund, 2015) accessed December 22, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

The SDN discusses the main policy issues and challenges in building an inclusive and safe Islamic finance industry, with emphasis on Islamic banking and Sukuk markets. To this end, it discuses why Islamic finance matters, taking into account its recent and prospective growth; and, its potential contributions in terms of financial inclusion, support for small- and medium-sized enterprises and investment in public infrastructure and, in principle, reduced systemic risk. It then covers a range of regulatory and other challenges, and offers policy advice, to address factors that hamper the development of the industry and, more generally, the delivery of its potential benefits. The paper covers regulatory and supervisory issues, safety nets and resolution frameworks, access to finance, Sukuk markets, and macroeconomic policies.

Subject: Banking, Deposit insurance, Financial crises, Financial regulation and supervision, Financial services, Islamic banking, Islamic banking supervision, Islamic finance

Keywords: Bank regulation, Central bank, Credit risk, Deposit insurance, Financial inclusion, Financial regulations, Global, Infrastructure finance, Islamic bank, Islamic banking, Islamic banking supervision, Islamic finance, Macroprudential policy, Monetary policy, Participation finance, Public financial management, Rate of return, SDN, Sukuk markets, Tax policy

Publication Details

Pages:

38
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2015/005
Stock No:

SDNEA201505
ISBN:

9781498325035
ISSN:

2617-6750

Notes

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