IMF: Islamic finance has potential to spur inclusive growth
IMF: Islamic finance has potential to spur inclusive growth
"Islamic financial institutions sustained little damage in the global financial crisis, in contrast to conventional financial institutions," said an IMF survey report made available on its website on Sunday.
"Because of the risk-sharing feature of Islamic finance, it is a less risky type of investment, which has potential to increase financial inclusion and spur growth," it added.
Commenting on it, IMF Deputy Managing Director Min Zhu stated: “We see Islamic finance as a potential engine for financial stability and growth.”
He, however, suggested that regulation and supervision of Islamic financial products need to be developed properly.
Notably, the IMF recently released a paper on Islamic finance and plans to deepen its work in this area over the coming months.
The IMF survey also stressed the importance of job creation and inclusive growth in the Middle East region.
Moreover, the international organization headquartered in Washington, DC, also organized a seminar on "Islamic finance: Unlocking its potential and supporting stability" during the IMF-World Bank spring meetings in the US capital, in which a panel of prominent officials discussed the rapid growth and benefits of Islamic finance and its considerable potential for further growth.
The panelists noted that Islamic financial institutions were largely unaffected by the global financial crisis because of the risk-sharing feature of Islamic finance and since Islam bans speculation, there must be a tangible asset underlying every transaction.
Addressing the seminar, Zeti Akhtar Aziz, Malaysia’s central bank governor and one of the panelists, underscored that Islamic finance is a form of financial intermediation that is highly attractive in an environment where investors are averse to risk.
Significantly, while Islamic finance is growing rapidly in Muslim countries, it is also attracting attention elsewhere, including many European countries.
Addressing the panel, Luxembourg Finance Minister Pierre Gramegna pointed that his country recently issued the first sovereign euro-denominated sukuk (Islamic bond).
“We wanted to diversify and innovate our activities,” he noted.
Islamic finance has the potential to help meet the demand for infrastructure financing, particularly in debt-strapped countries where public financing for this type of development is not always available, and sukuk with its public-private partnership type features is well suited, observed panelist Ali Babacan, deputy prime minister of Turkey.
It also has the potential to narrow the financial inclusion gap in regions like the Middle East and North Africa.
Significantly, on the final day of the spring meetings, the IMF and the Arab Monetary Fund (AMF) signed a pledge to enhance their cooperation.
Under the agreement, the two institutions will continue to provide training opportunities to Arab officials, support the development of domestic capital markets in the Arab countries, and strengthen their collaboration on the Arabstat initiative, which aims to develop efficient statistical systems in the region.
The two institutions also plan to carry out joint analytical work and organize events on high-priority topics of mutual interest.
Intel CEO resigns after probe of relationship with employee
- Corporations are under increasing pressure to “walk the walk” on executive behavior with the rise of the #MeToo movement
- The board named Chief Financial Officer Robert Swan as interim CEO
Intel Corp. Chief Executive Brian Krzanich resigned on Thursday after an investigation found he had a consensual relationship with an employee in breach of company policy.
The head of the largest US chipmaker is the latest in a line of men in business and politics to lose their jobs or resign over relationships viewed as inappropriate, a phenomenon highlighted by the #MeToo social media movement.
Krzanich led Intel as rival chipmakers ate away at its dominance in the technology over several decades and he also presided over a series of high-level executive departures.
The change in leadership comes as Intel expands beyond personal computers and servers into areas such as artificial intelligence and self-driving cars, where smaller competitors including Nvidia Corp. are strong. Qualcomm Inc. leads in the mobile chip market.
The board named Chief Financial Officer Robert Swan as interim CEO and said it has begun a search for a permanent CEO, including internal and external candidates.
“An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternization policy, which applies to all managers,” Intel said in a statement, declining to give any further information about the probe. Its shares fell 2.4 percent.
The company’s board was informed a week ago that Krzanich had a mutual relationship with an employee in his chain of command in the past, according to a source familiar with the matter who asked not to be named. The relationship began before Krzanich became CEO in 2013 and ended several years ago, the person said.
Krzanich, who did not have an employment contract, is entitled to a $38 million “walk-away” payment in the event of a voluntary termination, according to Intel’s regulatory filings.
Of that, $31 million is in the form of accelerated stock awards and $4.1 million in the form of deferred compensation, based on Intel’s share price on Dec. 29.
An Intel spokesman declined to say whether the walk-away payment applied to Krzanich’s resignation, but said the investigation into Krzanich’s conduct continued and that the board reserved the right to take further action.
Corporations are under increasing pressure to “walk the walk” on executive behavior with the rise of the #MeToo movement, said Ivan Feinseth, chief investment officer at Tigress Financial Partners.
In the last few months Martin Sorrell, founder of advertising giant WPP Plc, and casino mogul Steve Wynn of Wynn Resorts Ltd. resigned after accusations of impropriety. Wynn has denied the accusations and Sorrell has denied any wrongdoing.
Krzanich, 58, an engineer and Intel veteran known at the company as “BK,” was appointed CEO in May 2013. Intel shares more than doubled during his tenure as the company expanded into new markets.
He was recently credited with containing the fallout from the discovery of security flaws in the company’s chips that could allow hackers to steal data from computers, although his sale of much of his Intel stock before the flaws were disclosed to investors attracted some criticism.
Time for an outsider?
His temporary replacement, Robert Swan, has been Intel’s CFO since October 2016 and previously spent nine years as CFO of eBay Inc. Given his short tenure and lack of experience in manufacturing, he is not likely to be named permanent CEO, Cowen analyst Matthew Ramsay said.
While Intel dominates in processors for servers and data centers, global competitors are catching up with its manufacturing technology, said Bernstein analyst Stacy Rasgon.
“BK will go down in history as the CEO that let Intel’s process leadership advantage slip away,” he said, adding that a change at the top could bring in fresh ideas.
Kevin Cassidy, an analyst at Stifel, said that Intel would take the change in stride.
“Although we respect Krzanich’s efforts in redirecting Intel’s strategy from a computer-centric to a data-centric company, we view Intel as a process-driven company with a deep bench of CEO candidates that can continue to drive the corporate strategy,” he said.
In its 50-year history, Intel has never appointed a permanent CEO who did not come up through the company’s ranks.
But those ranks are thinner than they used to be, with prominent Intel executives such as former CFO and manufacturing chief Stacy Smith, former president Renee James, ex-architecture chief Dadi Perlmutter and Dianne Bryant, who headed the data center group, leaving in recent years.
Instead, Krzanich’s replacement could end up being one of the outsiders he brought into the company’s executive ranks, a sort of “insider outsider” such as Murthy Renduchintala, Intel’s chief engineering officer who joined Intel in 2015 after helping lead Qualcomm’s chip business.
“They’ve got some very good people they’ve brought in,” said Dan Hutcheson, CEO of VLSI Research Inc, who “know the company, know the new direction. It’s not a turnaround story.”
UBS analyst Tim Arcuri wrote to clients that “the door is open to hire from the outside.”
Intel on Thursday raised its second-quarter revenue and profit forecast, saying it expects quarterly revenue of about $16.9 billion and adjusted profit of about 99 cents per share, up from a previous forecast of $16.3 billion in revenue and adjusted earnings per share of 85 cents.
Analysts on average were expecting revenue of $16.29 billion and adjusted profit of 85 cents per share.
“There are no new payments as part of his departure,” a source familiar with the company told Reuters.