Thursday, 8 December 2011

A Step Forward For Islamic Finance Authenticity: IIBR | alifarabia

‘Don’t cheat the world of your contribution. Give it what you’ve got.’ – Steven Pressfield

On November 22, 2011, the world’s first Islamic interbank benchmark rate (IIBR) was launched. It is the result of a collaborative approach taken by many Islamic financial institution, industry associations, and Shariah scholars, over the course of 24 months, to a decades-old industry challenge: how to decouple Islamic finance from a conventional Western pricing benchmark (LIBOR) and the law of necessity when an ‘Islamic’ alternative was not available. The objective was to support and preserve Islamic finance authenticity.

The IIBR is an interbank benchmark that offers a reliable and realistic benchmark to better measure the cost of funding for Islamic financial institutions. The IIBR, contributed pricing for Shariah compliant funding, is the DNA of Islamic banking, as the industry, today, is commercial banking over investment banking.

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