The Islamic Banking Conference, Singapore, 16 March 2005

He will also sit in a panel session on governance with world luminaries like William Seidman, where his global best practice initiatives for Islamic finance will be discussed, making it the most important Islamic finance dialogue to be held in the region. As the first secretary-general of the Islamic Financial Services Board (IFSB), Dr. Rifaat Ahmed Abdel Karim oversees the standards setting authority’s efforts to reinforce transparency in Islamic finance globally. Previously, he held the rank of secretary-general at another international standard-setting body, the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), for eight years. Dr. Rifaat has long championed international cooperation between Islamic and other international financial institutions and banks, and harmonized global strategies to ensure stability and soundness of the global Islamic financial services industry. Dr. Rifaat identifies the three key strategic areas of development in the industry as: a global accounting and financial reporting framework, a global prudential and supervisory framework consistent with internationally recognised best practice in the overall global finance industry, and a global shariah framework. Because the Islamic banking industry is still in relative infancy, Dr Rifaat believes that a lack of understanding, or bias is impeding the growth of this market. Due to this, higher credit risk, which results in an increase in the cost of capital, places Islamic banking at a serious disadvantage. Therefore, a remedy would be to inculcate a strong disclosure regime based on an internationally recognised set of financial reporting standards. Dr Rifaat, who has a PhD in accounting and finance from the University of Bath in the UK, believes that not only will this move ensure good corporate governance and protect investors, but strengthen the credibility of the Islamic financial services industry, thus leading to a lower cost of capital. During Dr. Rifaats term at the AAOIFI, the institution adopted accounting standards for three financial instruments: the Murabaha to the purchase order, Musharaka financing and Mudaraba financing. Some of his work has focused on ensuring market stability through the development of international standards consistent with Islamic rules and principles. The IFSB also plans to focus on developing risk management instruments and cultivating sound risk management practices for Islamic banks. Because self-regulation of shariah boards has led to a wide variation in terms of reference, Dr. Rifaat says that consistency of shariah-compliant regulation across all Islamic nations is necessary. “If we do not make progress towards harmonizing shariah rulings, our work relating to harmonizing accounting, prudential and supervisory standards will be undermined.” Dr. Rifaat will be a panelist in a dialogue and Q&A session with former US Vice President Mr. Al Gore where Mr. Gore may respond to issues such as the experience of large Asian corporations in accessing US investors, the influence of hedge funds and instruments like real estate investment trusts (REITS) on corporate behaviour, and other proposed issues. Dr. Rifaat’s sessions will be augmented by perspectives from other leaders such as Dr. Mohamad Nedal Alchaar, the current secretary-general of the AAOIFI, and practitioners from different jurisdictions such as Mohamad Toufic Kanafani, chief executive officer of Noriba Bank in Bahrain and Dr. Yahia Abdul-Rahman, CEO & Chairman of Whittier Bank in California. Details of the Agenda: http://www.asianbankerforums.com/summit2005