AMMAN: According to finance minister, the Islamic finance assets rise to 41.8 trillion dollars last year. while the Islamic finance sector needs further regulations and supervision, said the International Monetary Fund. The ethics-based fast-growing sector faces several key challenges if it is to unlock its huge potential and develop safely, the IMF said in a statement.
The statement added that the sector, which bans speculation, still lacks regulatory and supervisory frameworks catering to its unique risks, noting that the cross-border operations of Islamic financial institutions have expanded considerably without regulatory harmonization.
“These developments indicate a need for increased regulatory clarity and harmonization, closer cooperation between Islamic and conventional financial standard-setters, and further enhancement of tools for effective supervision,” it said. The IMF said that Islamic finance has the potential to contribute to the global economy, promising to foster greater financial inclusion.
Islamic finance’s risk-sharing features and prohibition of speculation suggest that it may, in principle, pose less of a systemic risk than conventional finance, it said.
