The IFSB issues Exposure Draft of the Technical Note on Macroprudential Tools for IIFS (Banking Segment) (ED-TN 6)

The Islamic Financial Services Board (IFSB) has today issued the Exposure Draft (ED) of the Technical Note on Macroprudential Tools for IIFS (Banking Segment) (ED-TN-6) for a 60-day Public Consultation period starting from 6 May to 5 July 2024. The IFSB invites comments from central banks, regulatory and supervisory authorities, international organisations, financial market players, institutions offering Islamic financial services (IIFS), academics and other interested parties.

The TN aims to facilitate effective macroprudential policy for Islamic banking, covering both systemically-relevant banks (which are deemed D-SIBs) as well as smaller banks that provide Islamic financial services to firms and households in accordance with Sharīʻah rules and principles.

Specifically, the objectives of the TN are to:

• to provide guidance on adjustments to available macroprudential tools to reflect the specificities of Islamic banking contracts (“adaptation”);
• to address challenges in identifying system-wide vulnerabilities in, and calibrating macroprudential tools for the Islamic banking sector (“implementation”); and
• to make recommendations to enhance the governance of macroprudential policy according to the characteristics of Islamic banking (“governance”).

The IFSB will be conducting an online public hearing (via webinar) as part of the public consultation process. Participation in the webinar is free and open to all. Details will be announced in due course.

The softcopy of ED-TNMTIB is available on the IFSB website, https://www.ifsb.org/consultation/. The IFSB Secretariat invites all interested parties, especially members of the IFSB, to send their comments to the IFSB Secretariat through email to [email protected] by 5 July 2024 at the latest.