Monday, April 30, 2012

INDONESIA - EVENTS - 2nd BI Seminar on Islamic Finance - Can Islamic Finance Focus on Productive Economic Activities Promote Growth & Financial Stability? (Bandung - May 7-8, 2012)


www.bi.go.id - Development of Islamic finance would ideally promote financial transactions with underlying asset that attached to the goods market or productive economic activities. The application of this ideal is perhaps entails considerable challenge to Islamic financial institutions particularly in creating some sharia-compliant but economically feasible financial products. Yet, the actual stage of economic development in Indonesia, and possibly in other emerging countries, demand alternate solutions to channel available financial resources to productive economic sectors which not only offer growth opportunities, but expectedly would also fundamentally improve the output and structure of country’s economy.
Currently, the Indonesian Islamic Banking industry is characterized by a significant financing to deposit ratio, while placement to financial market products still relatively low. Nevertheless, the tendency towards the use of larger financial markets products continues to grow, as it may improve bank’s efficiency. Thus, the trend of disintermediation following the improving performance of financial markets and investment rating, are inevitably will affect the future shape of Islamic banking. However, the fact of repeated financial crises including the most recent financial market and debt crisis, seem to confirm risk pertinent to this tendency.
The experience from the latest financial crisis has, in general, changed the landscape of regulatory and supervisory framework of central banks, relevant authorities and development agencies. The changes referred to, among others, a tendency toward stricter regulation and monitoring especially for systemic financial institutions, restrictions on certain business activities, as well as enhanced transparency to reduce the potential for moral hazard. In some respects, these changes may not be relevant to the current state of the Islamic financial industry, though the nature of these policies still need to be understood by regulators. Perhaps more important is to reconsider the effectiveness of such solutions and any other alternatives in crisis prevention and what should authorities do, by exploring solutions which are more appropriate for more balanced and sustainable financial institution and economic growth from the perspective of Islamic financial system.
Development of Islamic financial system is inextricably associated to the interest of the state and development agencies to reduce poverty and improve various parameters of welfare for more balanced economic growth. These objectives can be achieved by involving the large part of communities in the process of economic development, which in the context of the financial system is done by making financial services acceptable by, as well as accessible to, the public. In this regard, it is important for Islamic finance stakeholders to adopt more effective strategy to strengthen the role of the Islamic financial institutions to improve public awareness and access to financial services.
With regard to the abovementioned issues, this seminar will address various topics related to the role of Islamic finance in supporting the development of real sector, while improving social welfare and enhancing financial system stability.
2012 May Bi Seminar Bandung

Source: http://www.bi.go.id/web/id/Ruang+Media/Agenda+Kegiatan+BI/Kalender+Kegiatan/islamic_finance_070512.htm
Source: http://www.bi.go.id/NR/rdonlyres/351EC32F-306D-4283-BA69-2F5CFFAF42F8/25753/islamic_itl_seminar2012.pdf

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