Bandar Seri Begawan - After almost a decade following the mid-1990 global financial crisis that had significant impact on the Asian economy, the world has now come to realise that Islamic financing is perhaps considered the most stable form of financing, especially in a time where governments are vulnerable to financial change.
In explaining this phenomenon that has "caused communities to distrust the conventional banking system", the 1997 crisis, explained Universiti Islam Sultan Sharif Ali (UNISSA) Rector Dr Hj Serbini Hj Matahir@Md Tahir during the opening of the International Conference on Islamic Finance 2012 (ICiF 2012) and 6th Regional Syariah Scholars' Dialogue (MCSN) yesterday, was the direct effect of "the weak system of quality in the financial world that is based on interest, which has failed to function as an indirect screening mechanism".
The gathering of those from the financial world and academia, taking place at The Rizqun International Hotel, was graced by His Royal Highness Prince Haji Al-Muhtadee Billah, the Crown Prince and Senior Minister at the Prime Minister's Office.
As he strengthened his case with the backing of research that compares the 10 biggest conventional banks with the 10 biggest Islamic banks as cited in the Global Financial Stability Report 2010, the rector stated that "the collective market model among the conventional banks had deteriorated by as much as 42.8 per cent whilst the Islamic banks only felt a decline of 8.5 per cent".
This research, he added, "clearly explains that the Islamic financial system that is free from interest is more stable in the face of a global financial crisis.
"This realisation has heightened the awareness to develop and strengthen the economic system and Islamic financing should be carried out and enhanced as time goes by to hinder the effects of an even worse economic crisis," he went on to say
The ICiF 2012 and MCSN 6, he added, will provide a platform for stakeholders to share their research and fresh ideas that will help contribute to the Islamic banking and financial sectors.
An effort between UNISSA, International Finance in Islamic Research (ISRA) Malaysia and Centre for Islamic Banking, Finance and Management (CIBFM) Brunei, the meeting features the presentation of several papers from local and international experts.
It is meanwhile hoped that a resolution that is robust and credible would be considered as a means "to spur the development of a nation".--Courtesy of Borneo Bulletin