KUALA LUMPUR: The Islamic Financial Services Board plans to draw up guidelines to help Shariah banks manage liquidity risks, its secretary-general said, as the industry looks to beef up regulation after the financial crisis. No major Islamic banks have collapsed as a result of the financial crisis. But Shariah banking has been hit by sukuk defaults, a slump in Dubai real estate and a major debt restructuring. The board is an umbrella group for Islamic financial regulators. Secretary-General Rifaat Ahmed Abdel Karim said it will ask its council’s approval this month to draft liquidity risk standards, which he described as an urgent matter. “Islamic financial institutions don’t have adequate tools to manage their liquidity,” Abdel Karim told Reuters in an interview. “The majority of them tend to pile on cash because they cannot invest in short-term instruments. That seems to have put a strain on them.”
