The IFSB Issues Compilation Guide on Prudential and Structural Islamic Finance Indicators

Kuala Lumpur, November 7, 2007 – Limited availability of statistical information and lack of cross-country historical data with sufficiently long time-series have been identified as some of the major challenges faced by the Islamic Financial Services Board (IFSB) in developing its international prudential standards for the Islamic financial services industry. In addressing this need, the IFSB has issued a Compilation Guide on Prudential and Structural Islamic Finance Indicators (PSIFIs), which covers Guidance on the Compilation and Dissemination of Prudential and Structural Islamic Finance Indicators for Banking and Near-Banking institutions offering Islamic financial services.

The Compilation Guide, which aims to act as a guide for standardising the methodology of data compilation and dissemination among institutions offering Islamic financial services, marks the completion of the first stage of the database development.

The Guide is expected to:

• benefit market players and the supervisory authorities who facilitate the monitoring and analysis of the soundness and stability of the Islamic financial services industry (IFSI) through a set of prudential, structural and financial strength indicators, as well as foster cooperation among central banks/monetary authorities and other relevant supervisory authorities;
• support and help coordinate the formulation, development and enhancement of appropriate international prudential standards by the IFSB;
• strengthen transparency and international comparability of domestic IFSIs in order to facilitate their integration into the international financial system through public accessibility to the Prudential Islamic Finance Database and other published cross-country industry data in IFSB research reports.

IFSB Secretary General, Professor Rifaat Ahmed Abdel Karim says, The PSIFIs is consistent with other international financial statistics such as the Financial Soundness Indicators prepared by the International Monetary Fund and the database of the Bank for International Settlements. The PSIFIs, however, is adapted appropriately to cater for the specificities of IIFS and enhanced by some structural indicators.

The IFSB is currently working initially with five countries that have agreed to participate in the second phase of the project which restricts data collection at this stage to the banking and near-banking segment of the industry. In due course, the IFSB will invite more financial data compilers from among supervisory and regulatory authorities that are member countries of the IFSB, broadening both the scope and geographical coverage of the guide.

Download Compilation Guide