KUALA LUMPUR: The pace of development of the Islamic financial market has gathered momentum with the formation of various international Islamic organisations to study and promote it.'' ''
Gatehouse Bank chief executive officer Richard Thomas said the world financial system generally favoured debt-related products to equity products and this would promote financial instability.'' ''
"The Islamic economic model has more balance as it has more equity products and should be a safer economic model for the world," he told a media briefing at the World Congress Accountants 2010 here on Wednesday, Nov 10.
Thomas said the Islamic financial market also needed regulators to give equity-related products the same tax advantages as the debt-related ones.
He said the market recorded faster growth compared to any other financial system although it still lacked instruments and infrastructure.
"In such a period of extraordinary challenges and uncertainties, Islamic finance has continued its global expansion and development," he said.
Paul Wouters, counsel of Bener Law Office Istanbul (Turkey), said Islamic finance would serve as an alternative economic model as it has fewer bubbles and burst, unlike Western-style economic model
"The conventional market deals with financial debt trading. It creates financial instrument securitisation debts. It also creates several layers of finance that weres built of nothing but just repackaging." he said.
Islamic finance, he said, allowed securitisation of debt and asset but not the layering.
"This is why balloons will normally never happen in Islamic finance," he said.
Etsuaki Yoshida, deputy head for Africa and the Middle East at the Japan Bank for International Cooperation, however, said the Islamic finance in the market still lacked liquidity as well as hedging tools.
The global Islamic financial market is estimated to be worth US$230 billion, with an annual growth rate of 12% to 15%. Islamic funds in global financial institutions are said to be worth US$1.3 trillion.
The Islamic banking system currently accounts for 20% of Malaysia's financial system while the sukuk market accounts for over 50% of the bond market.
It runs parallel to the conventional financial system. ' Bernama
Gatehouse Bank chief executive officer Richard Thomas said the world financial system generally favoured debt-related products to equity products and this would promote financial instability.'' ''
"The Islamic economic model has more balance as it has more equity products and should be a safer economic model for the world," he told a media briefing at the World Congress Accountants 2010 here on Wednesday, Nov 10.
Thomas said the Islamic financial market also needed regulators to give equity-related products the same tax advantages as the debt-related ones.
He said the market recorded faster growth compared to any other financial system although it still lacked instruments and infrastructure.
"In such a period of extraordinary challenges and uncertainties, Islamic finance has continued its global expansion and development," he said.
Paul Wouters, counsel of Bener Law Office Istanbul (Turkey), said Islamic finance would serve as an alternative economic model as it has fewer bubbles and burst, unlike Western-style economic model
"The conventional market deals with financial debt trading. It creates financial instrument securitisation debts. It also creates several layers of finance that weres built of nothing but just repackaging." he said.
Islamic finance, he said, allowed securitisation of debt and asset but not the layering.
"This is why balloons will normally never happen in Islamic finance," he said.
Etsuaki Yoshida, deputy head for Africa and the Middle East at the Japan Bank for International Cooperation, however, said the Islamic finance in the market still lacked liquidity as well as hedging tools.
The global Islamic financial market is estimated to be worth US$230 billion, with an annual growth rate of 12% to 15%. Islamic funds in global financial institutions are said to be worth US$1.3 trillion.
The Islamic banking system currently accounts for 20% of Malaysia's financial system while the sukuk market accounts for over 50% of the bond market.
It runs parallel to the conventional financial system. ' Bernama
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