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Management of cash 'big challenge'

MANAMA: An important challenge for the Islamic finance industry is to establish effective liquidity management.

For Islamic financial institutions their internal liquidity management operations must be supported by an industry wide and International money market that is active, liquid, deep and, most importantly easy to access," Housing Minister and AAOIFI board or trustees chairman Shaikh Ibrahim bin Khalifa bin Ali Al Khalifa said.

"In this respect I am pleased to announce the co-operation between the AAOIFI and the International Islamic Finance Market (IIFM) relating to its master agreement for treasury placement (MATP)," he told delegates at the conference yesterday.

"AAOIFI and IIFM are working closely to ensure that the MATP confirms to AAOIFI standards and we hope this will enable MATP to gain even greater acceptance and consequently strengthen the foundation for liquidity management for the international Islamic finance industry.

"Another important challenge that the financial crisis has demonstrated is the need for transparency in terms of information on financial performance as well as operational practices," he added.

"In any uncertain and difficult economic environment, market confidence can only be assured if financial institutions are transparent with their financial reporting."



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