IFSB fleshes out PSIFI database

The Islamic Financial Services Board (IFSB) has released a second set of its Prudential and Structural Islamic Financial Indicators (PSIFIs) from 16 member countries, dating from December 2013 to December 2014.

Secretary-General of the IFSB Jaseem Ahmed said, “In the context of the heightened awareness of vulnerability of all financial systems to a range of risks, the PSIFI provides a new tool for monitoring the soundness and stability of Islamic finance.

"The support of multilateral organisations – such as the IMF, ADB and IDB – have greatly assisted the progress on this project. It is our aim to continue to expand the scope of the PSIFI to include the participation of new jurisdictions, as well as expansion of data to the Islamic capital market and takāful sectors of the industry.”

PSIFIs aim to provide data on the financial soundness and growth of the Islamic banking systems in participating IFSB member jurisdictions. The first set of data was released on 27 April 2015 covering the period up to December 2013. The second release adds the indicators for the four quarters of 2014, with necessary adjustments and revisions to the earlier data set. It thus provides more complete data than the earlier release as many member jurisdictions have improved their data collection and consolidation framework for the Islamic banking industry in line with the requirements of PSIFI project.

The Task Force on PSIFIs – which includes representatives from 16 member jurisdictions as well as international organisations such as the IMF – updated some indicators after the first release to enhance their clarity and consistency across jurisdictions. In the new release, a number of jurisdictions have also started reporting of the data on macro-prudential indicators such as assets held by domestic systemically important banks, leverage ratio, as well as liquidity coverage ratio (LCR).

The countries participating in this project are: Afghanistan, Bahrain, Bangladesh, Brunei, Egypt, Indonesia, Iran, Jordan, Kuwait, Malaysia, Nigeria, Oman, Pakistan, Saudi Arabia, Sudan, and Turkey.

The IFSB is now collecting data for the first two quarters of 2015 which will be targeted for dissemination in Q1 of 2016.

Interested?

The complete PSIFI Database, including metadata, is available on the PSIFI portal at the IFSB website

Read the IFSB PSIFI Brief for more background \

IFSB unveils Islamic Financial Services Industry Stability Report for 2015

The Governor of the National Bank of Kazakhstan, HE Kairat Kelimbetov, launched the Islamic Financial Services Industry (IFSI) Stability Report 2015 during the opening session of the 12th Islamic Financial Services Board (IFSB) Summit on 20 May in Almaty, Kazakhstan. The report aims to contribute to a wider cross-border engagement on stability issues in Islamic finance, while helping to strengthen the building blocks needed for greater resilience.

Said the Secretary General of the IFSB Jaseem Ahmed: "The issuance of the IFSB’s third Islamic Financial Services Industry Stability Report takes place at a time of continuing concern over a fragile and uneven global economic recovery, and the potential for volatility in the financial sector. Against this backdrop, the regulatory changes to the capital and liquidity framework initiated by the Group of Twenty (G20) and the Financial Stability Board (FSB) has seen the issuance of a range of guiding principles by the IFSB, culminating in two standards in 2015, on liquidity management and on core principles.” 

Both standards set the stage not only for the integration of the IFSI into the global economy, but also into the global surveillance mechanism for financial stability. The IFSI Stability Report 2015 complements the standards with discussions on the following topics: 

An overview of the IFSI as well as updates on trends and developments in the three sectors of the industry – Islamic banking, the Islamic capital market and takaful. It also assesses the resilience of the Islamic financial system, which includes technical analyses of selected indicators as well as assessment of risks and vulnerabilities in the sectors.

Initiatives undertaken by international standard-setting bodies to further ensure the stability of the financial institutions and markets, as well as the implications of such reforms for institutions offering Islamic financial services (IIFS). It also reviews the progress of various projects and initiatives undertaken by the IFSB to enhance the supervisory framework so as to ensure stability and soundness of the IFSI.

A surveillance framework for the global financial system including identification of the gaps in the global surveillance framework in the absence of a set of core principles for Islamic finance, which eventually led to the development of an advanced approach to the assessment of supervisory and stability regimes for Islamic finance. It also tracks the implementation mechanisms undertaken by the global standards-setters, which provide a valuable reference for strengthening implementation efforts in the IFSI.

Emerging issues in Islamic finance, including financial consumer protection in Islamic finance, and the importance of having a global Islamic finance database for financial stability, focusing on the IFSB’s initiative on the Prudential and Structural Islamic Finance Indicators (PSIFIs).

Interested?

Download the IFSI Stability Report 2015. 

Read the Suroor Asia blog posts on PSIFIs and core principles.

ISFB shares internationally comparable indicators for soundness of Islamic banking systems

The Islamic Financial Services Board (IFSB) has developed indicators on the financial soundness and growth of Islamic banking systems in 15 member countries*. 

The indicators, called Prudential and Structural Islamic Financial Indicators (PSIFIs), are the first set of internationally comparable measures of the soundness of Islamic banking systems. The indicators are part of an international effort involving the IFSB and other organisations to construct a comprehensive picture of activity in the Islamic financial services industry. Due to rapid growth and significance of Islamic finance in many jurisdictions, such information is increasingly needed to understand the structure, soundness, and growth of the Islamic finance component within the entire financial systems.

The PSIFIs, to be updated quarterly, capture information on the size, growth and structural features of Islamic banking systems and on their macroprudential condition by looking at measures of their capital, earnings, liquidity, and exposures to various types of risks. They also cover the indicators on capital adequacy and liquidity based on newly issued IFSB Standards to complement international regulatory reforms under the Basel III regime.

PSIFIs cover aggregated data of Islamic banking institutions at the country level, compiled by the regulatory and supervisory authorities (RSAs) of the participating countries. The data are separately provided on standalone Islamic banks and Islamic windows of conventional banks in jurisdictions where available.
Many of the PSIFIs are parallel to the widely used IMF Financial Soundness Indicators (FSIs) on the strength or vulnerabilities of financial systems, but are customised for Islamic banking. As such, they will serve to highlight the role of Islamic banking within national economies and permit comparisons between the conventional and Islamic banking systems.

The PSIFI Database currently represents PSIFI data as of December 2013. Data are provided for various types of “prudential indicators” (PIFI) covering capital adequacy, leverage, nonperforming financing, earnings, liquidity, and foreign currency exposure as well as “structural indicators” (SIFI) focusing on items such as number of branches, employees, and size of total assets, funding and financing portfolios. The database also includes metadata which provides information on the design and specifications of data elements.

The current phase of the project is being undertaken with technical assistance from the Asian Development Bank.

Want to explore?

The PSIFI Database is available on the PSIFI portal.
Read the IFSB PSIFI Brief.

*Afghanistan, Bahrain, Bangladesh, Brunei, Egypt, Indonesia, Jordan, Kuwait, Malaysia, Nigeria, Oman, Pakistan, Saudi Arabia, Sudan, and Turkey.