Integrating Islamic Finance to Global Financial System: the Role of the Islamic Financial Services Board (IFSB)

A prudential framework is an important element in facilitating the successful integration of Islamic financial services to the global financial system. In recognition of this need, various stakeholders decided to establish the Islamic Financial Services Board (IFSB) to spearhead the development of a uniform set of prudential, supervisory and disclosure standards for the Islamic financial services industry internationally. Over the last decade, the IFSB has made laudable progress in developing prudential standards, facilitating the development of liquidity infrastructure, and creating awareness of Islamic finance. These have been a step toward strengthening the Islamic financial services industry. With the globalization of Islamic finance and beyond this decade, it will be important for the IFSB to maintain the momentum of strengthening the industry and at the same time building closer and effective coordination with relevant stakeholders in the global financial system.