Praise for Islamic Finance: The New Regulatory Challenge, Second Edition
"The emergence of Islamic finance as a major force in the world financial system has focused attention on regulatory issues. This book, edited by Professor Archer and Professor Karim, two of the most respected figures in the field, is an important point of reference for those who have to deal with these issues, whether in regulatory authorities or in the financial institutions themselves."
Hon. Mr. Justice Blair, London
"The world′s financial regulators have taken too long to appreciate the importance of adapting their regulatory frameworks to the needs of the fast–growing Islamic finance sector. Simon Archer and Rifaat Karim, the leaders in the field, have put together a fascinating collection of essays that show just what has to be done. It is a very timely book indeed."
Howard Davies, Professor of Practice at the Institut d′Etudes Politiques de Paris (Sciences Po); Chairman, Phoenix Group of Life Insurance Companies
"The first edition of Islamic Finance: The Regulatory Challenge by Professors Simon Archer and Rifaat Ahmed Abdel Karim was an important addition to the literature on the regulation of Islamic finance. This Second Edition addresses the implications of the recent global financial crisis on the regulation of Islamic financial services. The book deals with the relevant regulatory issues in a timely manner and will be much welcomed by both practitioners and academics."
Dr. Zeti Akhtar Aziz, Governor, Bank Negara Malaysia
About the Editors xv
About the Contributors xvii
Foreword xxvii
Preface xxix
Acknowledgments xxxi
PART ONE: The Nature of Risks in Islamic Banking 1
CHAPTER 1: Supervision of Islamic Banks: The Regulatory Challenge–Basel II and Basel III 3
Simon Archer and Rifaat Ahmed Abdel Karim
CHAPTER 2: Banking and the Risk Environment 13
Brandon Davies
CHAPTER 3: Risk Characteristics of Islamic Products: Implications for Risk Measurement and Supervision 49
Venkataraman Sundararajan
CHAPTER 4: Risk in a Turbulent World: Insights from Islamic Finance 77
Sami Al–Suwailem
CHAPTER 5: Capital Structure and Risk in Islamic Financial Services 95
Simon Archer and Rifaat Ahmed Abdel Karim
CHAPTER 6: Inherent Risk: Credit and Market Risks 107
John Lee Hin Hock
CHAPTER 7: Operational Risk Exposures of Islamic Banks 133
Simon Archer and Abdullah Haron
CHAPTER 8: Information Technology Risks in Islamic Banks 153
Samir Safa
CHAPTER 9: Law and Islamic Finance: An Interactive Analysis 163
Yusuf Talal DeLorenzo and Michael J. T. McMillen
CHAPTER 10: Legal Risk Exposure in Islamic Finance 225
Andrew White and Chen Mee King
CHAPTER 11: Shari′ah–Non–compliance Risk 237
Mohamad Akram Laldin
CHAPTER 12: Supervisory Implications for Islamic Finance: Post–Crisis Environment 261
Peter Casey
PART TWO: Capital Adequacy 273
CHAPTER 13: Risk and the Need for Capital 275
John Board and Hatim El–Tahir
CHAPTER 14: Measuring Risk for Capital Adequacy: The Issue of Profit–Sharing Investment Accounts 285
Simon Archer and Rifaat Ahmed Abdel Karim
CHAPTER 15: Measuring Operational Risk 299
Sandeep Srivastava and Anand Balasubramanian
CHAPTER 16: Liquidity Risk 325
Richard Thomas
PART THREE: Securitisation and Capital Markets 337
CHAPTER 17: Securitisation in Islamic Finance 339
Baljeet Kaur Grewal
CHAPTER 18: The Role of Capital Markets in Providing Shari′ah –Compliant Liquidity 365
Prasanna Seshachellam
CHAPTER 19: Regulating the Islamic Capital Market 387
Nik Ramlah Mahmood
PART FOUR: Corporate Governance and Human Resources 399
CHAPTER 20: Corporate Governance and Supervision: From Basel II to Basel III 401
Carol Padgett
CHAPTER 21: Specific Corporate Governance Issues in Islamic Banks 417
Simon Archer and Rifaat Ahmed Abdel Karim
CHAPTER 22: Transparency and Market Discipline: Post–Basel Pillar 3 451
Daud Abdullah (David Vicary)
CHAPTER 23: Human Resource Management of Islamic Banks: Responses to Conceptual and Technical Challenges 473
Volker Nienhaus
PART FIVE: Conclusion 493
CHAPTER 24: Concluding Remarks 495
Simon Archer and Rifaat Ahmed Abdel Karim
Index 503
SIMON ARCHER is a Visiting Professor at the ICMA Centre, Henley Business School, University of Reading, UK, with responsibility for Islamic finance. He served as Professor of Financial Management at the University of Surrey and worked as Midland Bank Professor of Financial Sector Accounting at University of Wales, Bangor. Professor Archer studied Philosophy, Politics and Economics at Oxford University, and worked as a Chartered Accountant with Arthur Andersen in London before moving to Price Waterhouse, Paris, where he became a partner in charge of management consultancy services. He has consulted to the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). He has authored many books and academic papers on international accounting and issues in Islamic finance.
RIFAAT AHMED ABDEL KARIM has been the Chief Executive Officer of the International Islamic Liquidity Management since October 2012. He has been Visiting Professor, ICMA Centre, Henley Business School, University of Reading, UK, since 2008. He has played a pioneering role in the development of Islamic finance, while his leadership in drafting accounting, auditing, governance, Shari′ah, and regulatory standards has been instrumental in establishing the position of the Islamic financial services industry in the mainstream of global banking. He was secretary–general of the Islamic Financial Services Board (ISFB) and secretary–general of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). In addition to international recognition of his academic publications, which are mainly in tier–one international journals, in the field of Islamic finance, Professor Karim has garnered numerous accolades for his pioneering work, including the first Euromoney Outstanding Contribution to the Development of Islamic Finance Award.
