IFSB to revise capital adequacy terms for Islamic institutions

The plans of the Islamic Financial Services Board (IFSB) are directed towards revising its capital adequacy guidelines for Islamic financial institutions. The draft is expected to be issued in November in order to receive industry feedback. While the IFSB is responsible for the global guidelines for Islamic finance, national financial regulators determine how much capital banks must maintain and in what form. The original guidelines on capital adequacy were released by the IFSB in December 2005. At that time, they were based on Basel II standards. However, now stricter Basel III standards are used which require corresponding changes in the guidelines.

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