Macroprudential Regulation and Policy for the Islamic Financial Industry

This volume aims to discuss the
current research, theory, methodology and applications of macropreudential
regulation and policy for the Islamic financial industry. Published in
cooperation with the Islamic Research and Training Institute (IRTI), this book features
contributions from a workshop presented in collaboration with the University
College of Bahrain (UCB) in Manama, Bahrain, aimed to bring together experts in
Islamic banking and regulation and financial economics. This resulting book
sheds light on how macroprudential policy may be implemented in the Islamic
financial system, and indicates current challenges and their effects on
economic growth, financial stability and monetary regulation.

Macroprudential policy
is increasingly seen as a way of dealing with the different dimensions of
systemic risk. But many central banks, bank supervisors and regulators have
limited experience with macroprudential tools, particularly in the Islamic
financial industry. Given the complementarities between monetary policy and
financial stability, it appears that central banks would always play an
important role in macroprudential policy. But how should macroprudential policy
best interact with monetary policy? It is becoming more pressing for the central
banks to conduct monetary policy in which its conventional banking system
operates side by side with Islamic banking system. This question has received
increasing attention in the research literature but there is much we still need
to learn. This is why new insights from research on macroprudential policy –
which has gained important impetus in recent years – are so valuable. 









Featuring
contributions on topics such as macroprudential regulation, policy, tools and
instruments; governance, systematic risk, monetary policy, and bank leverage,
the editors provide a collection of comprehensive research covering the most
important issues on macroprudential policy and regulation for the Islamic
financial industry. This volume is expected to be a significant contribution to
the literature in the field of Islamic finance and evaluation of public
policies to promote the development for Islamic financial industry. It is also
served as a key text for students, academics, researchers, policy-makers in the
field of Islamic finance.