Islamic finance gains more attention as alternative system. Thus its recognizable that the basic rules of Islamic finance could relieve suffering markets and particularly international financial systems
Shariah transmission mechanism in dual monetary system of Indonesia
by Aam Slamet Rusydiana
This study tries to analyze shariah transmission mechanism in Indonesian dual monetary system, using Vector Auto Regression (VAR) and Vector Error Correction Model (VECM) methods.Results show that the relationship between SWBI (SBI Shariah) and shariah financing (LNFINCG) is negative. It means, when SWBI be higher, the quantity of shariah financing would be lower. And so do SBI and inflation (LNIHK). When the total of shariah financing be increase, it will gives positive contribution for reducing inflation rate in Indonesia, because with this system possibility to make equal growth among monetary and real sectors appears. Therefore, it will be strategic action for monetary authority to grow up shariah banking share in Indonesia, for minimizing bad inflation in economy.
Rusydiana, AS (2009), Mekanisme transmisi syariah pada sistem moneter ganda di Indonesia, Buletin Ekonomi Moneter dan Perbankan BI, Volume 11, Nomor 4, April 2009
Dubai’s Saidi Calls G-8 ‘Obsolete,’ Says Gulf Needs FSB Role
sorced: Bloomberg
Dubai International Financial Centre Chief Economist Nasser Saidi said the Group of Eight is an “obsolete” forum and called for a greater role for Gulf countries in global decision-making.
“The GCC should have strengthened representation on the Financial Stability Board,” Saidi said at a conference in London today. Gulf Cooperation Countries, which are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, should translate financial strength “into a more prominent role on the world stage,” he said.
The Group of 20 has overshadowed the G-8 in the revamp of global regulation following the worst financial crisis since the Great Depression. The FSB, comprised of central bankers, finance ministers and regulators from G-20 countries, has been elevated to a global supervisory role with more members from countries including China, India and Saudi Arabia.
At the London summit in April, the FSB gained new powers to outline global financial regulations and took on an oversight role, together with the International Monetary Fund, to look at market risks. G-8 leaders will meet in Italy in July.
Saidi today outlined a four-pronged plan to “redefine and redesign” the relationship between the GCC and London, including a louder voice in decision-making for Gulf countries.
He repeated calls for a development and restructuring bank for the Middle East, which he said would aid geo-political stability in the region.
Saidi also called for more sophisticated debt markets that can trade both conventional instruments and those that are compliant with Islamic law, which prohibits the use of interest payments. Sharia-compliant products should be integrated into the western financial system, he said.
To contact the reporters on this story: Caroline Binham in London at cbinham@bloomberg.net
Dubai International Financial Centre Chief Economist Nasser Saidi said the Group of Eight is an “obsolete” forum and called for a greater role for Gulf countries in global decision-making.
“The GCC should have strengthened representation on the Financial Stability Board,” Saidi said at a conference in London today. Gulf Cooperation Countries, which are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, should translate financial strength “into a more prominent role on the world stage,” he said.
The Group of 20 has overshadowed the G-8 in the revamp of global regulation following the worst financial crisis since the Great Depression. The FSB, comprised of central bankers, finance ministers and regulators from G-20 countries, has been elevated to a global supervisory role with more members from countries including China, India and Saudi Arabia.
At the London summit in April, the FSB gained new powers to outline global financial regulations and took on an oversight role, together with the International Monetary Fund, to look at market risks. G-8 leaders will meet in Italy in July.
Saidi today outlined a four-pronged plan to “redefine and redesign” the relationship between the GCC and London, including a louder voice in decision-making for Gulf countries.
He repeated calls for a development and restructuring bank for the Middle East, which he said would aid geo-political stability in the region.
Saidi also called for more sophisticated debt markets that can trade both conventional instruments and those that are compliant with Islamic law, which prohibits the use of interest payments. Sharia-compliant products should be integrated into the western financial system, he said.
To contact the reporters on this story: Caroline Binham in London at cbinham@bloomberg.net
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