Tokyo, January 23, 2007 – Dr. Zeti Akhtar Aziz, Governor Central Bank of Malaysia, and Chairperson of the Islamic Financial Services Board (IFSB), and Professor Rifaat Ahmed Abdel Karim, Secretary-General of the IFSB addressed on Monday a gathering of over 200 financial industry practitioners and stakeholders at the Seminar on Islamic Finance: Challenges and Opportunities for Japan this afternoon, held at the Japan Bank for International Cooperation (JBIC) Headquarters in Tokyo. The Seminar, entitled “Seminar on Islamic Finance: Challenges and Opportunities for Japan” is jointly organized by the IFSB, Japan Bank for International Cooperation, Japan Institute for Overseas Investment, and supported by the Japanese Ministry of Finance, Financial Services Agency and Bank of Japan’s Center for Monetary Cooperation in Asia.
The Seminar was also addressed by Japanese and international key financial practitioners and industry players including Hiroshi Watanabe, Vice Minister of Finance for International Affairs, Koji Tanami, Deputy Governor and Managing Director of JBIC, Junichi Maruyama, Deputy Commissioner for International Affairs, Financial Services Agency and Dato’ Zarinah Anwar, Chairman, Securities Commission of Malaysia. Over 250 participants from over 10 countries attended the Seminar.
Dr. Zeti’s views are expected to lend credence to the positive developments of Islamic financial services, with vast opportunities for greater participation of new industry players.
Dr. Zeti stressed that to build a viable and sustainable Islamic financial system, emphasis has to be put on the comprehensive development of several essential components that will release Islamic finance’s potential to contribute significantly towards the overall development and growth process. These components are Islamic financial infrastructure, legal and Shari’ah infrastructure, regulatory and supervisory framework, and intellectual capital. She also mentioned that these efforts have to be at both the national and international levels to develop further the international architecture. The acceleration of the international integration of Islamic finance would strengthen further the global economic and financial inter-linkages and in so doing, would also open new frontiers towards achieving more balanced global growth and greater shared prosperity.
IFSB Secretary-General, Professor Rifaat Ahmed Abdel Karim, welcomes the initiative of the Japanese Government to tap Islamic capital market.
Professor Rifaat in his opening address said, “The IFSB welcomes JBIC’s initiative to issue Sukuk, and hopes that this will blaze the trail for other Japanese Government agencies and corporations to consider resorting to the Sukuk market to diversify their fundraising avenues, especially in tapping the growing wealth generated by high global oil prices, especially in the Middle East. The proposed issuance of Sukuk, would rank as the first sovereign Islamic issue by any major G8 country, enhancing the Islamic financial services industry’s potential for increased globalization, as well as its’ integration into the global financial system.”
IFSB addresses the challenges of the soundness and stability of the Islamic financial services industry.
Rifaat said that with such vast potential, the role of the IFSB is to promote proper check and balance mechanisms to enhance the soundness and stability of the industry. In meeting these challenges, the IFSB has issued three prudential standards, the latest of which, on Corporate Governance, was issued in December 2006. Two exposure drafts were also issued on Transparency and Market Discipline and Supervisory Review Process. The IFSB also holds international seminars, roundtables, workshops and conferences to interact with industry players and stakeholders in ensuring the relevancy of issues addressed by the organisation.
The standards and exposure drafts are downloadable from the IFSB website.
Terminology :
Sukuk
Sukuk is the plural of the Arabc word “Sakk” which means “certificate”. It is a type of investment certificate, where holders posses undivided beneficial ownership in the underlying assets, with risk-return characteristics similar to conventional debt securities. Sukuk holders are entitled to share in the revenues generated by the underlying assets as well as in the proceeds from the realisation of these assets.
