Ahmed succeeds Professor Rifaat Abdel Karim, the inaugural secretary-general who was responsible for establishing the IFSB operationally in 2003 and steering it to its present pre-eminence. Ahmed’s appointment was confirmed at the 17th meeting of the council of governors that was held in Jeddah.
He assumes his post on April 1 for a three-year tenure, just a few weeks prior to the annual summit of the IFSB which will this year be hosted for the first time by a European Union country, Luxembourg, in May. The job comes with all the perks of diplomatic status, with even the secretary-general’s luxury chauffer-driven official car exempt from the luxury tax which such items normally attract in Malaysia, where it is headquartered in Kuala Lumpur and operates under a special act of Parliament adopted by the then government of Prime Minister Mahathir Mohamed.
For Ahmed the challenges are implicit. On the one hand it is always daunting to follow in the footsteps of the first mover in any nascent major organization, especially of someone who has won many plaudits for his contribution to the development of the contemporary Islamic banking industry and of course for guiding the IFSB onto the stage of global finance whether in Washington, Basel or London.
On the other hand, like any organization, a new regime presents the opportunity not only for continuity and consolidation, but also for regeneration and the injection of new ideas. These ideals are indeed mutually inclusive.
Rifaat’s record speaks for itself. Under his watch, the IFSB has grown from a handful of few founding members to a staggering current membership of 195 institutions comprising 53 supervisory and regulatory authorities from the banking, capital markets and Islamic insurance (Takaful) sectors in 41 jurisdictions, as well as six international inter-governmental organizations, and 136 market players (financial institutions, professional firms and industry associations).
In fact, the latest institutions to join last week were the Securities and Exchange Organization, Iran, as a full member; the Banking Regulation and Supervision Board, Turkey, as an associate member; and First Energy Bank, Bahrain, Bank Eghtesad Novin, Iran and Yusr Islamic Investment Bank Ltd., UAE — all as observer members. At the same time, the Islamic Corporation for the Development of the Private Sector (ICD), the private sector financing arm of the Islamic Development Bank (IDB), which is already an associate member, was upgraded to a full member.
The IFSB has also, in eight years, issued 14 standards and guiding principles for the Islamic financial services industry, with the last three approved for issuance by the IFSB council in last week’s meeting. They include the standard on solvency requirements for Takaful (Islamic Insurance) undertakings; a guidance note in connection with risk management and capital adequacy standards: commodity murabahah transactions (CMT); and a guidance note on the practice of smoothing the profits payout to investment account holders.
The standard on solvency requirements for Takaful undertakings (IFSB-11) is concerned with the ability of Takaful undertakings to meet regulatory solvency requirements in a manner consistent with Shariah principles, which include a separation between the functions of mutual protection against specified risks by means of risk pooling in Takaful funds and the management of the underwriting process and fund investments by the Takaful operator.
The guidance note in connection with the risk management and capital adequacy standards: Commodity Murabahah transactions (GN-2) aims to highlight the risks associated with commodity Murabahah transactions and to guide supervisory authorities in their assessment of their implications with regard to the regulatory capital requirements of institutions offering Islamic financial services (IIFS).
The guidance note on the practice of smoothing the profits payouts to investment account holders (GN-3) draws attention to the practice of smoothing the profits payouts to investment account holders by IIFS by highlighting a number of related prudential concerns with respect to corporate governance, transparency, capital adequacy and harmonization of such practices.
Rifaat’s successor, Ahmed, a Bangladeshi national, has an impressive record in his own right. In his capacity in his erstwhile post as director, financial sector, public management and trade, Southeast Asia department of the Asian Development Bank (ADB), he was responsible for managing the multilateral development bank’s lending and capacity building operations in Southeast Asia; for the strengthening of supervision and regulatory capacities in banking, capital markets and non-bank sectors; and for the ADB's response in the region to the global crisis.
In fact, Ahmed already has a working relationship with the IFSB having managed the ADB's technical assistance (TA) program to the board, which was jointly funded with the IDB and which included assistance in developing prudential and regulatory standards for Islamic finance and also work on the possible issuance of sukuk in member countries common to both the IDB and ADB. He was also a member of the IFSB high level task force on liquidity management, which proposed the establishment of the recently-launched International Islamic Liquidity Management Corporation (IILM).
There could not be a bigger contrast between Rifaat, an accountancy don-cum-bureaucrat, and Ahmed, an acclaimed economist with degrees from Sussex and Yale, and a seasoned development banker.
Rifaat is also essentially an Islamic finance insider, while Ahmed has had a mere look-in through his work with the IFSB and ADB. This could be a double-edged sword. On the one hand, would he have the nose to navigate the politics of the IFSB and the industry, something that Rifaat seems to have been adept at? On the other hand, he may come with a fresh outlook hoping to prove that he is his own man with his own ideas, perhaps trying to widen the stakeholder base of the board and therefore the industry it serves.
Source : http://arabnews.com/economy/islamicfinance/article219212.ece - Dec 20, 2010
He assumes his post on April 1 for a three-year tenure, just a few weeks prior to the annual summit of the IFSB which will this year be hosted for the first time by a European Union country, Luxembourg, in May. The job comes with all the perks of diplomatic status, with even the secretary-general’s luxury chauffer-driven official car exempt from the luxury tax which such items normally attract in Malaysia, where it is headquartered in Kuala Lumpur and operates under a special act of Parliament adopted by the then government of Prime Minister Mahathir Mohamed.
For Ahmed the challenges are implicit. On the one hand it is always daunting to follow in the footsteps of the first mover in any nascent major organization, especially of someone who has won many plaudits for his contribution to the development of the contemporary Islamic banking industry and of course for guiding the IFSB onto the stage of global finance whether in Washington, Basel or London.
On the other hand, like any organization, a new regime presents the opportunity not only for continuity and consolidation, but also for regeneration and the injection of new ideas. These ideals are indeed mutually inclusive.
Rifaat’s record speaks for itself. Under his watch, the IFSB has grown from a handful of few founding members to a staggering current membership of 195 institutions comprising 53 supervisory and regulatory authorities from the banking, capital markets and Islamic insurance (Takaful) sectors in 41 jurisdictions, as well as six international inter-governmental organizations, and 136 market players (financial institutions, professional firms and industry associations).
In fact, the latest institutions to join last week were the Securities and Exchange Organization, Iran, as a full member; the Banking Regulation and Supervision Board, Turkey, as an associate member; and First Energy Bank, Bahrain, Bank Eghtesad Novin, Iran and Yusr Islamic Investment Bank Ltd., UAE — all as observer members. At the same time, the Islamic Corporation for the Development of the Private Sector (ICD), the private sector financing arm of the Islamic Development Bank (IDB), which is already an associate member, was upgraded to a full member.
The IFSB has also, in eight years, issued 14 standards and guiding principles for the Islamic financial services industry, with the last three approved for issuance by the IFSB council in last week’s meeting. They include the standard on solvency requirements for Takaful (Islamic Insurance) undertakings; a guidance note in connection with risk management and capital adequacy standards: commodity murabahah transactions (CMT); and a guidance note on the practice of smoothing the profits payout to investment account holders.
The standard on solvency requirements for Takaful undertakings (IFSB-11) is concerned with the ability of Takaful undertakings to meet regulatory solvency requirements in a manner consistent with Shariah principles, which include a separation between the functions of mutual protection against specified risks by means of risk pooling in Takaful funds and the management of the underwriting process and fund investments by the Takaful operator.
The guidance note in connection with the risk management and capital adequacy standards: Commodity Murabahah transactions (GN-2) aims to highlight the risks associated with commodity Murabahah transactions and to guide supervisory authorities in their assessment of their implications with regard to the regulatory capital requirements of institutions offering Islamic financial services (IIFS).
The guidance note on the practice of smoothing the profits payouts to investment account holders (GN-3) draws attention to the practice of smoothing the profits payouts to investment account holders by IIFS by highlighting a number of related prudential concerns with respect to corporate governance, transparency, capital adequacy and harmonization of such practices.
Rifaat’s successor, Ahmed, a Bangladeshi national, has an impressive record in his own right. In his capacity in his erstwhile post as director, financial sector, public management and trade, Southeast Asia department of the Asian Development Bank (ADB), he was responsible for managing the multilateral development bank’s lending and capacity building operations in Southeast Asia; for the strengthening of supervision and regulatory capacities in banking, capital markets and non-bank sectors; and for the ADB's response in the region to the global crisis.
In fact, Ahmed already has a working relationship with the IFSB having managed the ADB's technical assistance (TA) program to the board, which was jointly funded with the IDB and which included assistance in developing prudential and regulatory standards for Islamic finance and also work on the possible issuance of sukuk in member countries common to both the IDB and ADB. He was also a member of the IFSB high level task force on liquidity management, which proposed the establishment of the recently-launched International Islamic Liquidity Management Corporation (IILM).
There could not be a bigger contrast between Rifaat, an accountancy don-cum-bureaucrat, and Ahmed, an acclaimed economist with degrees from Sussex and Yale, and a seasoned development banker.
Rifaat is also essentially an Islamic finance insider, while Ahmed has had a mere look-in through his work with the IFSB and ADB. This could be a double-edged sword. On the one hand, would he have the nose to navigate the politics of the IFSB and the industry, something that Rifaat seems to have been adept at? On the other hand, he may come with a fresh outlook hoping to prove that he is his own man with his own ideas, perhaps trying to widen the stakeholder base of the board and therefore the industry it serves.
Source : http://arabnews.com/economy/islamicfinance/article219212.ece - Dec 20, 2010
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