Macroprudential Regulation and Policy for the Islamic Financial Industry

This volume aims to§discuss the current research, theory, methodology and applications of§macroprudential regulation and policy for the Islamic§financial industry. It features contributions from a workshop presented by§Islamic Research and Training Institute (IRTI) in collaboration with University§College of Bahrain (UCB) in Manama, Bahrain aimed to bring together experts in§Islamic banking and regulation financial economics. This resulting book will§shed light on how macroprudential policy may be implemented in the Islamic§Financial System; and indicate current challenges and their effect 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.§§