The Islamic Financial Services Board (IFSB)
Forums, think tanks & standards · Standard-setter for the Islamic finance industry
The Islamic Financial Services Board is an international body based in Kuala Lumpur that sets prudential and supervisory standards for the global Islamic finance industry.
At a glance
| Established | 2002 (operational 2003) |
|---|---|
| Headquarters | Kuala Lumpur, Malaysia |
| Role | prudential standards for Islamic finance |
| Analogue | a Basel-style standard-setter |
Established in 2002 and operational from 2003, the IFSB is to Islamic banking, insurance and capital markets roughly what the Basel Committee is to conventional banking: it issues standards and guidance on capital adequacy, risk management, governance and transparency, adapted to the distinctive contracts and risks of Shariah-compliant finance. Its members include central banks, regulators and multilateral institutions from across the Muslim world and beyond.
Its location in Kuala Lumpur reflects Malaysia's role as a leading centre of Islamic finance. The board works alongside other standard-setters — notably the accounting-and-auditing body AAOIFI, based in Bahrain — to bring consistency to a young, fast-growing and internationally dispersed industry, and its work connects directly to the doctrinal foundations described in Chronicle's articles on ribā, gharar and Islamic finance.
The IFSB is part of the technical infrastructure that has allowed Islamic finance to grow from a niche into a global industry, complementing the development finance of the Islamic Development Bank and the deliberations of the fiqh academies.
Related in Chronicle
Curated reference on Islamic belief and thought. On matters where traditions differ, positions are attributed rather than adjudicated; verify points of doctrine with qualified scholars.