IslamicFinance.de

The International Monetary Fund has endorsed the principles of Islamic finance, saying it could prove safer than conventional finance, but the multilateral lender warned Islamic bankers that they must tighten rules and follow them more consistently. A report released by the IMF this week noted that because Islamic banking forbids pure monetary speculation and stresses that deals should be based on real economic activity, it could pose less risk than conventional banking to the stability of financial systems. However, the industry could fail to achieve its promise – and even have a destabilising effect – if it does not design its rules more carefully and implement them more consistently, the report added.