Malaysian bank governor stresses strong liquidity management

Islamic financial institutions need to address their ability to manage liquidity urgently, a Malaysian official said here on Tuesday.

Governor of Malaysia’s central bank Zeti Akhtar Aziz said at a conference on financial stability that the recent financial crisis in advanced economies had demonstrated the consequences of liquidity constraints.

The turmoil had also underscored the importance of a strong and well-developed liquidity management infrastructure, added Zeti.

In order to facilitate effective cross-border liquidity management, Zeti said that the Islamic Financial Services Board (IFSB), in collaboration with the Islamic Development Bank (IDB), had established a liquidity management task force.

Hoping that the framework developed by the task force could be set in place in 2010, Zeti also called for the regulatory and supervisory framework to be strengthened.

The IFSB is an international standard-setting organization that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry.

The IDB is an international financial institution established in pursuance of the Declaration of Intent issued by the Conference of Finance Ministers of Muslim Countries in December 1973.

Touching on the development of Islamic banking in Malaysia, Zeti said the system had become a vibrant one in the country with banking assets accounting for 18.8 percent of the total banking assets.

Zeti noted that Malaysia had an efficient functioning Islamic money market traded in the domestic currency with greater monetary flexibility in the system, drawing wider participation from the international financial community.

Zeti also said that when Islamic finance continued to become an integral part of the global financial system, the current scope of cooperation framework could be broadened to deal with confronting new challenges.

sourece : pdo

Kuwait Finance House-Turkey licensed as Islamic bank in Dubai

The Kuwait Finance House-Turkey has been permitted as an Islamic bank in Dubai, following similar licences from Germany and Kazakhstan.
The move will surely shore up the bank’s efforts to expand its activities to cover new markets, and to prop up its position as an Islamic bank.
It is the first licence of its kind given to an Islamic bank according to the Fifth Category that allows the provision of multilateral services compliant with the Islamic Sharia, Mohammad Al-Omar, the bank board chairman, said in news remarks.
The bank was the first Islamic financial institution to get such a licence in Germany, he boasted.
The Dubai licence shows much confidence in the bank’s ability to build an economic partnership, he said.
For his part, the bank’s general manager Ofuk Iwan said by being permitted to work in Dubai, the bank has achieved a significant jump in efforts for operating in the Gulf market through presence in key financial centers.
He added that the bank would offer financial consulting, brokerage and finance services, while focusing on the development of Turkish-Gulf joint investments.

source : kuna