CBK: Is­lamic Fi­nance Con­fer­ence pro­motes Kuwait as financial hub

Kuwait Times - - BUSINESS -

KUWAIT: The Global Is­lamic Fi­nance Con­fer­ence, which is due in Kuwait on Novem­ber 11, will be a step to­wards the pro­mo­tion of Kuwait’s po­si­tion as a global financial hub, the Cen­tral Bank of Kuwait (CBK) said yes­ter­day.

Co-hosted by the CBK and IMF and held un­der the ti­tle: “Meet­ing Global As­pi­ra­tions”, the con­fer­ence will at­tract a host of in­ter­na­tional de­ci­sion-mak­ers, ex­perts and econ­o­mists, it said in a press re­lease. Spon­sored by His High­ness the Amir Sheikh Sabah Al-Ah­mad Al-Jaber Al-Sabah, the gath­er­ing is part of the CBK’s ef­forts ac­tiv­i­ties to­wards the de­vel­op­ment of Kuwait as a financial hub where a group of mone­tary and financial elites across the world can come to­gether in or­der to set out a vi­sion for the sus­tained growth of the Is­lamic fi­nance sec­tor.

The sig­nif­i­cance of the con­fer­ence stems from the large world pres­ence, es­pe­cially the par­tic­i­pa­tion of the In­ter­na­tional Mone­tary Fund (IMF), which is the world’s lead­ing eco­nomic in­sti­tu­tion, in ad­di­tion to the at­ten­dance of fi­nance min­is­ters and cen­tral bank gov­er­nors from sev­eral coun­tries, it said.

The con­fer­ees will mainly dis­cuss Is­lamic fi­nance which has only re­cently been on the agenda of world coun­tries, and has be­come part of their eco­nomic ac­tiv­i­ties, the CBK added. Glob­ally, the as­sets in­ter­me­di­ated by the Is­lamic fi­nance sec­tor reached an es­ti­mated $2.0 tril­lion cur­rently, and fur­ther growth is ex­pected. Al­though still a small share of global financial as­sets, its bank­ing seg­ment has be­come sys­temic in a dozen coun­tries, with im­pli­ca­tions for macroe­co­nomic and financial sta­bil­ity.

Is­lamic fi­nance has the po­ten­tial for fur­ther con­tribut­ing in at least three di­men­sions. First, it prom­ises to fos­ter greater financial in­clu­sion, es­pe­cially of large un­der­served Mus­lim pop­u­la­tions. Sec­ond, its em­pha­sis on as­set-backed fi­nanc­ing and riskshar­ing fea­ture means that it could pro­vide sup­port for small and medium-sized en­ter­prises (SME), as well as in­vest­ment in pub­lic in­fras­truc­ture.

Fi­nally, its risk-shar­ing fea­tures and pro­hi­bi­tion of spec­u­la­tion sug­gest that Is­lamic fi­nance may, in prin­ci­ple, pose less sys­temic risk than con­ven­tional fi­nance. For this po­ten­tial to be re­al­ized, how­ever, and to al­low this industry to de­velop in a safe and sound man­ner, a num­ber of chal­lenges will need to be ad­dressed.

The con­fer­ence will pro­vide an op­por­tu­nity for a global pol­icy di­a­logue among high-level pol­i­cy­mak­ers, in­clud­ing gov­er­nors of cen­tral banks and min­is­ters, reg­u­la­tors, con­ven­tional and Is­lamic stan­dard set­ters, lead­ing pri­vate and pub­lic sec­tor financial in­sti­tu­tions’ ex­ec­u­tives, and aca­demics, for draw­ing a vi­sion for the sus­tained growth of Is­lamic fi­nance industry, and pro­vide a plat­form for con­tin­ued work in this area, ac­cord­ing to the re­lease.

The one-day con­fer­ence is de­signed to en­cour­age broad in­ter­ac­tion among del­e­gates. It will com­prise four ses­sions. Be­sides the ple­nary ses­sion (with the Man­ag­ing Di­rec­tor of the In­ter­na­tional Mone­tary Fund and the Gover­nor of the Cen­tral Bank of Kuwait), three other ses­sions will ex­plore is­sues cen­tered round in­creas­ing financial in­clu­sion and growth through ac­cess to fi­nance; reg­u­la­tion and su­per­vi­sion to fos­ter sta­bil­ity, and de­vel­op­ing Sukuk and other long-term Is­lamic fi­nanc­ing for sus­tain­able de­vel­op­ment. The panel dis­cus­sions will be con­ducted as a con­ver­sa­tion among pan­elists, it added. —KUNA

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