Inherent in Islamic finance are explicit elements that contribute to financial stability, such as risk-sharing, its direct link to productive economic activity, and other inbuilt checks and balances that address many of the issues that surfaced in the conventional financial system during the global financial crisis. While these aspects of Islamic finance present the potential to reduce volatility, strengthen financial stability and contribute to better allocation of resources, the recognition of the existing challenges in fully realising these objectives, as well as the emerging challenges arising in the financial and economic environment due to low commodity prices and geo-political situation require deeper consideration of the next steps needed to strengthen the Islamic finance industry”s resilience and robustness. At the same time, in view of the growth of Islamic finance to domestic systemic significance in many jurisdictions as well as increasing integration in the global financial system and the resulting risk of spill over and contagion effects – additional consideration is needed in further developing the financial architecture and enabling environment for Islamic finance that could ensure sound development of the Islamic financial services industry in the wake of ongoing socio-economic challenges in various regions in general and GCC in particular.

Speaker: Professor Dr. Monzer Kahf, Professor of Islamic Finance and Islamic Economics, Faculty of Islamic Studies, Hamad bin Khalifa University, Doha, Qatar