IslamicFinance.de

Islamic finance is based on growth of assets, not financial engineering, and this organic growth makes it different from Western debt constructs, Justice and Development (AK) Party parliamentarian and economist has said.
Ibrahim Turhan, member of Turkish parliament for AK Party from Izmir, made the remarks in an interview with Anadolu Agency on the sidelines of the Second International Islamic Finance and Economics conference in Istanbul on Thursday.
Turhan, who is also an economist and former chief executive officer of Borsa Istanbul, said: “One of the principal causes of financial crisis of 2008-2009 was the vast market that had grown up for securitized instruments.

Momentum is building for economic relations between the Gulf States and Turkey, economists say. Turkey can increase the existing trade volume with the Gulf States by setting sector-based targets and by taking advantage of international conditions, according to Sedat Kutlu, an expert with the Turkish Arab Countries Businessmen’s Association. Exports and imports can open access to a broad base of businesspeople, The Economist Intelligence Unit noted in a July report that Turkey is developing as an increasingly important economic partner for the Cooperation Council for the Arab States of the Gulf (GCC) countries. Trade volume between Turkey and the GCC was close to $16 billion in 2014, according to EIU statistics, up from about $5 billion in 2005.

Islamic financial services are one of the top priorities for Turkey’s presidency of the G20, a senior Turkish finance official said on Wednesday. Speaking at a meeting of the Islamic Development Bank (IDB) in Mozambique’s capital Maputo, Deputy Undersecretary of the Turkish Treasury Burhanettin Aktas said Turkey believed strongly in the vital role the Islamic finance industry had to play in infrastructure and small-medium-enterprise (SME) financing. According to Aktas, Turkey has one of the highest growth potentials for Islamic financial services among the Organization of Islamic Cooperation countries, Turkey has developed new products, established a state-owned Islamic bank and plans to open two more state-owned Islamic banks.

Microfinance is a well-developed strategy to alleviate poverty around the world, Islamic Development Bank (IDB) President Ahmad Mohamed Ali said Monday. Speaking at the forum of "Exploring Innovative Solutions for Affordable Islamic Microfinance on the sidelines of the 40th Annual meeting IDB, Ali emphasized that microfinance is a rapidly growing market. Ali said that a number of challenges confront efforts for microfinance by Islamic banks today. These include the need for coordinating policy and direction, weakness in regulatory and supervisory environments, lack of awareness and education about Islamic finance, and a severe shortage of qualified and trained human capital.

Turkish Deputy Prime Minister Ali Babacan said on Tuesday that Bank Asya is in the hands of the Turkish banking watchdog and its insurance fund. On May 29, Turkey's Banking Regulation and Supervision Agency (BDDK), the country’s banking watchdog, ruled for the complete takeover of all shares of Bank Asya by the Savings Deposit Insurance Fund (TMSF). The deputy minister stressed that the BDDK and TMSF are independent organizations. Separately, Turkish stock exchange regulators on Tuesday lifted the ban on the trading of Bank Asya’s shares one day after it was halted. The bank’s shares opened at Friday’s closing prices 0.76 Turkish lira. The shares dropped to 0.69 lira, a loss of 9.21 percent.

Turkish Deputy Prime Minister Ali Babacan said on Wednesday that the growth of Islamic banking would strengthen Turkey’s financial system, praising the rapid growth of Islamic banks. Speaking at the 14th General Assembly meeting of the Participation Banks Association of Turkey in Istanbul, Babacan said the latest global economic crisis showed that interest-free financial methods are much more reliable, much more stable, and much more robust. His remarks came after one of Turkey's largest state-controlled banks, Ziraat Bank, was authorized by the country's banking regulator to start operations in its Islamic banking division last week. He also stated that an insurance system should also be developed using interest-free practice

Turkey, as the chair of G20 group, promotes Islamic finance because it offers additional financial instruments with less uncertainty and shared risks, according to the country’s deputy prime minister Ali Babacan. His comments were made during a panel discussion at the annual spring meetings of the IMF and World Bank Group in Washington. Islamic finance is safer, according to Babacan, who cited the 2000 and 2009 financial crises. Also for regulation purposes, macro credential purposes, it is considered as a less risky kind of financing means, he added. The more countries develop stronger legal frameworks to support Islamic finance, the more attention the system would get as issuers and investors who are sensitive to Islamic rules participate in the structure.

Turkey's third-largest state bank Vak?fbank has received regulatory approval Tuesday from the Banking Regulation and Supervision Agency to establish an Islamic banking division. Vak?fbank will be allowed to set up a stand-alone Islamic unit capitalized at $300 million. After the approval, the bank has nine months to establish its banking unit according to Turkish law. Shareholders of the new Islamic bank will include Turkish Directorate General of Foundations, Bayezid Han-? Sani (II. Bayezid) Vakf?, Mahmud Han-? Evvel bin Mustafa Han (I. Mahmud) Vakf?, Mahmud Han-? Sani bin Abdülhamid Han-? Evvel (II. Mahmut) Vakf? ve Murad Pa?a bin Abdusselam (Murat Pa?a) Foundation.