This 5-day Workshop is tailored for the regulatory and supervisory authorities for the banking sector, thus intend to be a Train the Trainer Programme for the staff on the IFSB Standards. The main focus of the Workshop lies in incorporating the latest IFSB Standards issued by the IFSB after the world post-crisis in 2008 and Basel III issuance which are IFSB-15: Revised Capital Adequacy Standard for Institutions offering only Islamic Financial Services (IIFS), GN-6: Guidance Note on Quantitative Measures for Liquidity Risk Management and IFSB-17: Core Principles for Islamic Finance Regulation (Banking Segment). In addition, the workshop will also cover sessions for Exposure Draft (ED) of Technical Note-2 (TN-2) on Stress Testing for IIFS which follows on from, and complements, the earlier IFSB-13, Guiding Principles on Stress Testing for IIFS. The IFSB-13, which was issued in 2012 provides a comprehensive stress testing framework for both IIFS and supervisory authorities.
As a background, the main objective of IFSB-17 is to provide a set of Core Principles – along with associated assessment methodology – for the regulation and supervision of the Islamic financial services industry (IFSI), taking into consideration the specificities of the IIFS in the banking segment, the lessons learned from the financial crisis, and complementing the existing international standards, principally the Core Principles for Effective Banking Supervision issued by the Basel Committee on Banking Supervision.
IFSB-15: Revised Capital Adequacy Standard, for its part, includes implementation of an optimal capital adequacy framework to facilitate the effective coverage of risk exposures of the IIFS as well as the allocation of appropriate capital to cover these risks in a manner that is based predominantly on the Standardised Approach. This Standard also provides guidance on the features and criteria for high-quality regulatory capital components, including Additional Tier 1 and Tier 2, which comply with Sharī`ah rules and principles. Similarly, it includes new guidance on macroprudential tools, such as capital buffers and leverage ratios (especially for domestic systemically important banks) which shall support the supervisory authorities in achieving the goal of protecting the banking system and the real economy from system-wide shocks.
Moreover, GN-6: Quantitative Measures for Liquidity Risk Management Guidance Note complements the Standard IFSB-12: Guiding Principles on Liquidity Risk Management for IIFS, and supports the harmonised application of the international regulatory regime in the area of liquidity risk management. This is achieved by providing guidance on the application of global liquidity standards for the IIFS, especially the Liquidity Coverage ratio (LCR) and Net Stable Funding Ratio (NSFR) at the current stage, with suitable adjustments based on the specific operational characteristics. Moreover, it provides guidance to supervisory authorities on the application of the LCR and NSFR in their jurisdictions and on their role in assessing the discretionary items specified in this GN, including application of the alternative liquidity approaches (ALA).
TN-2: Technical Note on Stress Testing provides stress testing scenarios that address multiple types of risks and their interrelated effects on the overall financial position and performance of the portfolio, the institution itself or the overall financial system. It incorporates risk specificities of Sharī`ah-compliant contracts’ when conducting stress tests on an IIFS.
Overall, this Workshop intends to be a Train the Trainer programme for the staff of regulatory and supervisory authorities on the IFSB Standards, and aims to:
Participation in this Workshop is by INVITATION only. For queries, please contact the IFSB Secretariat, Mr. Hamizi Hamzah at [email protected].
Programme – Event Session(s)
| Date | Time | Topics |
|---|---|---|
| Day 1 24/10/2016 |
09:00 – 09:30 | Registration |
| 09:30 – 09:45 | Welcoming Address & Group Photo | |
| 09:45 – 11:15 | Session 1: IFSB-17 – Core Principles for Islamic Finance Regulation (Banking Segment) Necessary Preconditions for Effective Supervision Assessment Methodology for CPIFR Responsibilities, Objectives and Powers Independence, Accountability, Resourcing and Legal Protection for Supervisors | |
| 11:15 – 11:30 | Coffee Break | |
| 11:30 – 13:00 | Session 2: IFSB-17 – Core Principles for Islamic Finance Regulation (Banking Segment) Cooperation and Collaboration Supervisory Approach, Techniques and Tools Treatment of Investment Account Holders (IAHs) Corporate and Sharī`ah Governance Framework | |
| 13:00 – 14:00 | Lunch and Prayer | |
| 14:00 – 16:00 | Session 3: IFSB-17 – Core Principles for Islamic Finance Regulation (Banking Segment) Risk Management Process Transactions with Related Parties Transparency and Market Discipline Case Study | |
| 16:00 – 16:30 | Coffee Break | |
| Day 2 25/10/2016 |
09:30 – 11:00 | Session 4: IFSB-15: Revised Capital Adequacy Standard for IIFS Components of Capital Capital Conservation Buffer Countercyclical Buffer Domestic Systemically Important Banks |
| 11:00 – 11:30 | Coffee Break | |
| 11:30 – 13:00 | Session 5: IFSB-15: Revised Capital Adequacy Standard for IIFS Credit Risk Weights for Various Counterparties Off-balance Sheet Exposures Exposures in Investments Made under Profit-Sharing Modes Credit Risk Mitigation | |
| 13:00 – 14:00 | Lunch and Prayer | |
| 14:00 – 16:00 | Session 6: IFSB-15: Revised Capital Adequacy Standard for IIFS Understanding the Market Risk in Islamic Finance Policies and Procedures for Market risk Guidance on Valuation Practices Group Exercise | |
| 16:00 – 16:30 | Coffee Break | |
| Day 3 26/10/2016 |
09:30 – 11:00 | Session 7: IFSB-15: Revised Capital Adequacy Standard for IIFS Overview of Operational Risk Understanding Operational Risk in Islamic Finance Measuring Operational Risks Group Exercise |
| 11:00 – 11:30 | Coffee Break | |
| 11:30 – 13:00 | Session 8: GN-6: Guidance Note on Quantitative Measures for Liquidity Risk Management Application of the LCR in IIFS Definition and Categorisation of High Quality Liquid Assets (HQLA) Operational Considerations for HQLA Infrastructure Issues in the Availability of Sharī`ah-compliant HQLA | |
| 13:00 – 14:00 | Lunch and Prayer | |
| 14:00 – 16:00 | Session 9: GN-6 – Guidance Note on Quantitative Measures for Liquidity Risk Management Components of Total Net Cash Outflows Formula for Calculating NSFR Available and Required Stable Funding Case Study | |
| 16:00 – 16:30 | Coffee Break | |
| Day 4 27/10/2016 |
09:30 – 11:00 | Session 10: GN-6 – Guidance Note on Quantitative Measures for Liquidity Risk Management The Internal Liquidity Adequacy Assessment Processes & Supervisory Liquidity Review Process Principles for Applying Alternative Liquidity Approaches Disclosure Requirements for LCR and NSFR Case Study |
| 11:00 – 11:30 | Coffee Break | |
| 11:30 – 13:00 | Session 11: TN-2 – Stress Testing for IIFS Basic Requirements for Conducting Stress Tests Solvency Stress Tests Stress Test Models Role of RSAs and Critical Considerations | |
| 13:00 – 14:00 | Lunch and Prayer | |
| 14:00 – 16:00 | Session 12: TN-2 – Stress Testing for IIFS Liquidity Stress Tests Liquidity Stress Scenarios and Stress Test Models Review and Analysis of the Results Case Study | |
| 16:00 – 16:30 | Coffee Break | |
| Day 5 28/10/2016 |
09:30 – 10:30 | Session 13: TN-2 – Stress Testing for IIFS Recent Developments in Stress Tests Integrated Liquidity and Solvency Tests Network Contagion and Second-round Effect Analysis Cross-border Macro Stress-testing |
| 10:30 – 10:45 | Coffee Break | |
| 10:45 – 12:00 | Session 14: Experience Sharing on the IFSB Standards’ Implementation | |
| 12:00 – 12:15 | Closing & Certificate Giving Ceremony | |
| 12:15 – 14:00 | Lunch and Prayer |
Downloadable Document(s)
| 1.) | Event Session(s) – PDF Format |
