Arshad, Khairuddin Hj --- "Islamic Deposit Insurance System: The Malaysian Model" [2011] ELECD 509; in LaBrosse, Raymond John; Olivares-Caminal, Rodrigo; Singh, Dalvinder (eds), "Managing Risk in the Financial System" (Edward Elgar Publishing, 2011)

Book Title: Managing Risk in the Financial System

Editor(s): LaBrosse, Raymond John; Olivares-Caminal, Rodrigo; Singh, Dalvinder

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857933812

Section: Chapter 24

Section Title: Islamic Deposit Insurance System: The Malaysian Model

Author(s): Arshad, Khairuddin Hj

Number of pages: 7

Extract:

24. Islamic deposit insurance system:
the Malaysian model
Khairuddin Hj Arshad

24.1. THE NEED FOR ISLAMIC DEPOSIT
INSURANCE

Since the last three decades, Islamic finance has been experiencing tremen-
dous growth and today, it has transformed into a vibrant intermediation
mechanism. According to a McKinsey's 2007­08 report, Islamic assets
have reached USD 750 billion and with growth rates of 15 per cent to 20
per cent per annum, the assets are expected to hit USD 1.6 trillion by 2012.
The number of Islamic financial institutions globally has reached 625 in
over 75 countries.
Amidst the recent more challenging environment, the continued expan-
sion of global Islamic finance demonstrates its viability and resilience and
this has drawn significant interest from global regulators and players. The
role and relevance of Islamic finance in contributing to global financial
stability and in support of overall global economic growth is discussed in
this chapter.
Against this backdrop, there is a need to support the continuous growth
of Islamic finance and further strengthen its viability and resilience. Among
the key initiatives is the establishment of Islamic deposit insurance, which
is a mechanism to protect Islamic deposits and maintain public confidence
in the safety of their Islamic deposits in the Islamic banking institutions.
Additionally, some countries are looking at deposit insurance as a catalyst
to sustain and attract Islamic funds in their countries, thus helping them
to spur the growth of Islamic finance and their economy.


24.2. MALAYSIA'S ISLAMIC FINANCIAL SYSTEM

...