Corporate Social Responsibility and Islamic Financial Institutions (IFIs): Management Perceptions from IFIs in Bahrain

Islamic finance is gaining greater attention in the finance industry, and this paper analyses how Islamic financial institutions (IFIs) are responding to the welfare needs of society. Using interview data with managers and content analysis of the disclosures, this study attempts to understand management perceptions of corporate social responsibility (CSR) in IFIs. A thorough understanding of CSR by managers, as evident in the interviews, has not been translated fully into practice. The partial use of IFIs’ potential role in social welfare would add further challenges in the era of financialisation

Appraisal on End Products and Services Offered by Islamic Banks from Maqasid Shari’ah Perspective

Question arises whether the products and services offered by the Islamic financial institutions (IFIs) genuinely meeting the requirement of Shari’ah. At present, not only Shari’ah advisors have been appointed to scrutinize and endorse the new products and services. In fact, majority of the IFIs have established units or departments to ensure the documentations, legal and Shari’ah framework, the process and procedure, and implementation are in line with the precept of Shari’ah. IFIs not only must avoid riba, but as well as other important elements such as gharar, deception, inequality, duress in developing and executing the end products of IFIs in order to ensure justice and social welfare prevail. This could only be achieved if the products and services approved uphold the importance of Maqasid Shari’ah. This paper will evaluate the key value chain in product approval process, role of Shari’ah advisor in approving products and services in IFIs as well as to raise possible issues and challenges related to the value chain. This paper will also look into the importance of Maqasid Shari’ah in product approval process as it is a vital element to be considered so as to avoid legal conflicts, litigation risk, instability (reputational risk) to the IFIs, tarnish the image of so called Shari’ah compliance products, uphold justice (contracting parties) and more importantly the pure teaching of Islam.Islamic financial institutions, Shari’ah committee, Maqasid Shari’ah.

Regulating islamic financial institutions : The nature of the regulated

More than 200 Islamic financial institutions (IFIs) operate in 48 countries. Their combined assets exceed $200 billion, with an annual growth rate between 12 percent and 15 percent. The regulatory regime governing IFIs varies significantly across countries. A number of international organizations have been established with the mandate to set standards that would strengthen and harmonize prudential regulations as they apply to IFIs. The authors contribute to the discussion on the nature of prudential standards to be developed. They clarify the risks that IFIs are exposed to and the type of regulations that are needed to systematically manage them. They consider that the industry is still in a development process whose eventual outcome is the convergence of the practice of Islamic financial intermediation with its conceptual foundations. The authors contrast the risks and regulations needed in the case of Islamic financial intermediation operating according to core principles and current practice. They outline implications for approaches to capital adequacy, licensing requirements, and reliance on market discipline. They then propose an organization of the industry that wouldallow it to develop in compliance with its principles and prudent risk management, and facilitate its regulation.Labor Policies,Payment Systems&Infrastructure,International Terrorism&Counterterrorism,Financial Intermediation,Banks&Banking Reform,Financial Intermediation,Banks&Banking Reform,Environmental Economics&Policies,Economic Theory&Research,Banking Law

The Bail-In Problem: Systematic Goals, Ad Hoc Means

In this paper we analyze the recent efforts of the international financial institutions to limit the moral hazard created by their assistance to crisis countries. We question the wisdom of the case-by-case approach taken in Pakistan, Ecuador, Romania and Ukraine. We show that because default and restructuring are so painful and costly, it is simply not time consistent for the IFIs to plan to stand aside if the markets refuse to roll over maturing claims, restructure problem debts, or provide new money. Because these realities create an incentive to disburse even if investors fail to comply, the IFIs are then placed in the position of having to back down on their previous conditionality, which undermines their credibility. And since investors are aware of these facts, their behavior is unlikely to be modified by the IFIs' less-than-credible statements of intent. Hence, this approach to bailing in the private sector' will not work. Fortunately, there is an alternative: introducing collective-action clauses into loan agreements. This, and not ad hoc efforts to bail in the private sector, is a forward-looking solution to the moral hazard problem.

ASSESSMENTS AND CONTROVERSIES ON THE ROLE OF THE INTERNATIONAL FINANCIAL INSTITUTIONS – IFIS - WITHIN A GLOBALIZED MARKET

The world economy registered within the last decades a series of transformations which had as a result astounding economic growth, yet also violent crises, a maturing of the international cooperation with positive effects, yet also negative aspects as a cinternational financial institutions, multilateral development institutions, globalization, international capital flows

Mainstreaming Informal Financial Institutions

Informal financial institutions (IFIs), among them the ubiquitous rotating savings and credit associations, are of ancient origin. Owned and self-managed by local people, poor and non-poor, they are self-help organizations which mobilize their own resources, cover their costs and finance their growth from their profits. With the expansion of the money economy, they have spread into new areas and grown in numbers, size and diversity; but ultimately, most have remained restricted in size, outreach and duration. Are they best left alone, or should they be helped to upgrade their operations and integrate into the wider financial market? Under conducive policy conditions, some have spontaneously taken the opportunity of evolving into semiformal or formal microfinance institutions (MFIs). This has usually yielded great benefits in terms of financial deepening, sustainability and outreach. Donors may build on these indigenous foundations and provide support for various options of institutional development, among them: incentives-driven mainstreaming through networking; encouraging the establishment of new IFIs in areas devoid of financial services; linking IFIs/MFIs to banks; strengthening NGOs as promoters of good practices; and, in a nonrepressive policy environment, promoting appropriate legal forms, prudential regulation and delegated supervision. --

Electricity liberalisation: the beginning of the end

The debate is beginning to shift a little on electricity liberalisation and privatisation, but there are many vested interests that will continue to promote the idea

Religious actors, civil society, and the development agenda: The dynamics of inclusion and exclusion

This article uses the World Bank\u27s engagement with religious actors to analyse their differentiated role in setting the development agenda raising three key issues. First, engagements between international financial institutions (IFIs) and religious actors are formalised thus excluding many of the actors embedded within communities in the South. Secondly, the varied politics of religious actors in development are rarely articulated and a single position is often presented. Thirdly, the potential for development alternatives from religious actors excluded from these engagements is overlooked, due in part to misrecognition of the mutually constitutive relationship between secular and sacral elements in local contexts

The Viability of Economic Reform Programs Supported by the International Financial Institutions

In seeking to make programs of economic reform supported by the IFIs more successful it is important to ensure that they are viable. Will governments be persuaded to participate? Will they complete the programs they negotiate? And will the IFIs be prepared to provide the resources? This paper formally analyses the factors influencing viability. It examines the constraints on participation and the need for incentive compatibility. The analysis identifies the threats to viability and the direction that reform should take. It places the effectiveness of programs firmly within a political economy framework and extends recent theories of program implementation by examining participation from the viewpoint of both the governments that demand assistance and the IFIs that supply it.