QUANTITATIVE FINANCIAL METHODS

Quantitative Financial Methods



Quantitative Financial Methods

Introduction

Some aspects of Islamic banking rules and allow it to successfully confront the circumstances that led to the western financial system crisis. Establishment in 1975 of the Islamic Development Bank and Dubai Islamic Bank was the beginning of the official development of an Islamic banking. To date, the principles of Islamic banking have been successfully used not only in Muslim countries, but also in Europe and the United States. Many foreign banks have opened and maintained so-called "Islamic windows" (branch of bank, engaged in the provision of services under the Sharia for the provision of similar services that exist in parallel with a standard set of services to such banks (Ahmed, 2001: 69).

The main reasons for such a rapid development of Islamic banking have become a significant windfall to the Muslim world, providing a large number of temporarily free liquidity is not redirected to finance investment projects in these countries, and the rapid development of financial infrastructure through the establishment of financial centers in Saudi Arabia, Kuwait, United Arab Emirates and Malaysia (Ahmed & Khan, 2007: 45). Such increase the quality of the financial infrastructure in these countries stimulate an investment available resource in projects abroad, which increases as the liquidity crisis in the U.S. and Europe.

Discussion Analysis

At present there are about 300 major Islamic financial institutions managing portfolios of assets, estimated at about 500 billion U.S. dollars. In the East, the main centers of Islamic banking in Malaysia and is the state of the Middle East; the West such a center is the United Kingdom. This fact is the result of a developed financial infrastructure of the UK government and the desire to bring the system of legislation and prudential standards to a level that would allow Islamic banking to operate successfully, along with the traditional banking system. Thus, it was announced the continuation of discussions with the financial authorities (Financial Services Authority) on the regulation of production and circulation of sukuk and amending the tax law, which will be held during 2009, to consider sukuk as standard bond for tax purposes.

It should also be noted that during budget discussions the United Kingdom in 2008, it was noted the intention to work with Islamic finance in the Treasury's strategy to ensure the status of London as a leading financial center (Akkizidis & Khandelwal, 2008: 14). According to experts, in London, with its almost two million Muslim populations and a dominant position in the capital market, is thus a link that will direct surplus Muslim countries to the West. The development of Islamic banking faces today with the following main issues.

Frames. Expansion of existing financial institutions and the creation of new ones in connection with the development of Islamic banking create the need for qualified personnel. A current capability of educational institutions, engaged in education of specialists in the field of Islamic finance, is unable to meet this need. In this regard, Islamic financial institutions should focus on educating staff on their own. In addition, the increased cost of finding and hiring qualified personnel forced financial institutions to ...