«Standard & Poor's»: Basel 3 enhance capitalization and liquidity management at Islamic banks

[yota691]

«Standard & Poor's»: Basel 3 enhance capitalization and liquidity management at Islamic banks

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Date Published: Tuesday, August 19, 2014

(Dubai - Union)

She agency «Standard & Poor's Ratings Services», believes that capital requirements adjusted for Islamic Financial Services Board of the Basel Convention 3, can help to strengthen the Islamic finance industry, according to a report published by the agency yesterday entitled: «Basel 3 allows for Islamic banks the opportunity to strengthen the capitalization and liquidity management have ».

The standard specifies the fifteenth (15) of the Islamic Financial Services Board, issued in December 2013 private Islamic financial institutions how they will be applied where Islamic banks Basel 3.

It will Islamic Financial Services Board is likely to issue a guidance note on the criteria and calculate liquidity coverage ratio and net stable funding ratio at the beginning of 2015.

 

 

Hence, the introduction of the liquidity coverage ratio may handle some weaknesses in the sector for a long time, especially the lack of the presence of high-quality liquid assets.

 

Said Mohamed Damak, analyst credit agency «Standard & Poor's»: «scenario assumes that our basic that it would not much change on the quality of the capital of Islamic banks, which we see as being strong in the middle, at the same time we believe that the high capital requirements through the introduction of capital funds and new prevention will help make the sector more resilient ».

Capital and help these preventive ultimately Islamic banks to better cope with the volatile nature of the economies of countries in the main business activities in which it operates.

Most Islamic financial institutions that characterize the emerging economies, and also tend to have a relatively large exposure to the real estate sector.

He added: «While we still see that the level of liquidity of the Islamic financial institutions that characterize an adequate level in the medium, we believe that the implementation of Basel 3 will provide an opportunity for the sector in order to develop a new range of high quality liquid assets to address the acute shortage of such tools».

The Central Bank of Malaysia during the past few years to address the shortage of high quality liquid assets through its transformation into the largest source of short-term instruments, equipped with the Malaysian Islamic banks liquidity management tools that are needed the most.

Has been emulated by other central banks, and liquidity management of Islamic Foundation International, and the Islamic Development Bank, providers sector with new tools to manage liquidity.

The work encourages the application of the Basel Convention 3 also sovereign governments and companies who received a high rating on the Bonds listed in developed markets and high liquidity to make them eligible for the inclusion of high-quality liquid assets.

The agency predicted that runs the application of the Basel Convention on the test 3 also dealing with investment accounts to participate in the profits in terms of liquidity and funding.

Owners of investment accounts to participate in the profits theoretically obliged to share any losses, but that may increase the volatility and liquidity requirements to cover these accounts, and reduces their role as sources of ongoing funding.

(Paris Union)

 

[yota691]

Standard & Poor's: Basel 3 will help to strengthen the Islamic finance sector

 

August 19, 2014 5:21   Last Updated: August 19, 2014 5:21 Source: Direct

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Agency said Standard & Poor's Ratings Services said capital requirements adjusted for Islamic Financial Services Board of the Basel Convention 3 can help to strengthen the Islamic finance industry, according to a report published by the agency yesterday under the title: «Basel 3 allows for Islamic banks the opportunity to strengthen the capitalization and liquidity management have ».

And sets the standard 15 Islamic Financial Services Board, issued in December 2013 private Islamic Financial Institutions how they will be applied where Islamic banks Basel 3, which will be Islamic Financial Services Board is likely to issue a guidance note on the criteria and calculate the percentage coverage of liquidity and the net percentage of stable funding at the beginning of 2015 . From the standpoint of S & P, the introduction of the liquidity coverage ratio may handle some of the weaknesses in the sector for a long time, especially the lack of the presence of high-quality liquid assets.

He said credit analyst at Standard & Poor's Mohamed Damak: «scenario assumes that our basic that it would not much change on the quality of the capital of Islamic banks, which see it as a strong, on average, at the same time we believe that the high capital requirements through the development of capital and new preventive will help make the sector more resilient ».

Capital will help these preventive ultimately Islamic banks to better cope with the volatile nature of the economies of countries in the main business activities in which it operates. Most Islamic financial institutions that characterize the emerging economies also tend to have a relatively large exposure to the real estate sector.

While we still see that the level of liquidity of the Islamic financial institutions that characterize an adequate level in the medium, we believe that the implementation of Basel 3 will provide an opportunity for the sector in order to develop a new range of high quality liquid assets to address the acute shortage of such tools.

The Central Bank of Malaysia during the past few years to address the shortage of high quality liquid assets through its transformation into the largest source of short-term instruments, equipped with the Malaysian Islamic banks liquidity management tools that are most in need. Has been emulated by other central banks, and liquidity management of Islamic Foundation International, and the Islamic Development Bank, providers sector with new tools to manage liquidity. The work encourages the application of the Basel Convention 3 also sovereign governments and companies who have got a high rating on the Bonds listed in developed markets and high liquidity to make them eligible for the inclusion of high-quality liquid assets.

Will apply the Basel Convention on the test 3 also dealing with investment accounts to participate in the profits from the hand of liquidity and funding. Owners of investment accounts to participate in the profits theoretically obliged to share any losses, however, that it may increase the volatility and liquidity requirements to cover these accounts, and reduces their role as sources of ongoing funding.

[sandfly]

THANKS

[blueskyline]

How would someone get ahead of investing in islamic banking ?

[waterman13]

Here we go, Basel 3! Thanks YOTA! I think this is great news.

Wm13

[mrref]

Just when you think we are getting close they introduce something new, its freaking amazing.....