Презентация на тему «Islamic Liquidity Management Issues» |
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Презентация на тему: «Islamic Liquidity Management Issues». Автор: warren edwardes. Файл: «Islamic Liquidity Management Issues.ppt». Размер zip-архива: 388 КБ.
Islamic Liquidity Management Issues
содержание презентации «Islamic Liquidity Management Issues.ppt»| № | Слайд | Текст |
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Islamic Liquidity Management IssuesISLAMIC BANKING AND FINANCE Lebanese American University, School of Business, Irwin Hall, Beirut, Lebanon February 23–24, 2006 Warren Edwardes, ceo, Delphi Risk Management Limited e: we@dc3.co.uk w: dc3.co.uk Warren Edwardes |
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Delphi’s website contains:articles on Islamic banking on: dc3.co.uk/ibnews The full speech will be on: dc3.co.uk/IslamicLiquidity060218.pdf with PowerPoint on dc3.co.uk/IslamicLiquidity060218.ppt Warren Edwardes |
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thoughts on liquidityMore than listing Is there a buyer when you are a seller? More than negotiable At what price? Warren Edwardes |
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thoughts on liquidityBritish Gas Falklands War Dumping of Aaa A1-P1+CP Don’t hold paper in the news Warren Edwardes |
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thoughts on liquidityMidland Bank Crocker bank led to dumping of Midland CDs Don’t hold paper in the news Warren Edwardes |
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thoughts on liquidityContinental Illinois Plenty of “liquid” assets No diversification of liabilities mainly wholesale and few retail customers Warren Edwardes |
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thoughts on liquidityAccess to determinate amount of cash When you need it Preservation of capital on demand Free from price risk Undoubted quality low credit risk and be seen to be so Need a quality Triple-A overnight instrument with stable capital values Warren Edwardes |
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Background to Islamic liquidity“Islamic banking is having a growth spurt. …. shortage of inter-bank liquidity, … signs that tentative moves are being made to address these shortcomings.” Middle East Economic Digest December 19, 1997 – over 8 years ago! Warren Edwardes |
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Background to Islamic liquidityAsset/liability gap management Shortage of instruments LMC /IIFM initiatives Numerous Sukuks including Malaysia, Bahrain & IDB Sukuks Liquidity and price transparency is required for an active secondary market Issues oversubscribed but minimal trading This lack of liquidity paradoxically increases the demand for liquidity Warren Edwardes |
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liquidity managementInvestments long dated – deposits are short massive gap Massive liquidity problem Need flexibility with Shariah compliance Sukuks held to maturity Short selling? Stock borrowing? Warren Edwardes |
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liquidity managementLME Murabaha is main destination Bilateral transactions Counterparty limits Some funds exist But not capable of market size transactions Segmentation inevitable Co-operation needed with a market level solution Warren Edwardes |
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No Inter-bank marketBalance sheet management problem Cannot easily finance when there are withdrawals So more liquidity than needed by a conventional bank Bilateral Murabaha with break clauses is widespread liquidity vehicles cannot withstand a $100million injection or withdrawal Warren Edwardes |
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Risk PyramidSound ALM requires a quality / liquidity pyramid. Most liquid is USD bill or note Nil earnings but price stability vs USD Then a range of bonds from super nationals to governments and funds Most with price risk Some with earnings volatility but fixed price No such highly rated Islamic instruments Warren Edwardes |
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Risk PyramidGovernments reserves are in gold and government Triple-A paper Fiduciary or trust money should be both liquid and safe and price risk free Basle II is approaching Even before that sound risk management principles apply Warren Edwardes |
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Risk PyramidPyramid of risk Blended portfolio from Triple-A down to Single-B Can interpolate risk between Triple A and Single-A Cannot extrapolate risk from lesser risks to triple-A Warren Edwardes |
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Risk PyramidRisk / return trade-off in conventional markets Add to this the Halal / Haram trade-off Need Triple-A Halal instruments Warren Edwardes |
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Conclusion & summarySukuks bought to hold minimal secondary market for on sale Mark to market and price determination is difficult Shortage of paper Is debt trading really Halal? Novation agreements Cancellation of original purchase and replacement with new owner in contract note Warren Edwardes |
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Conclusion & summaryAsset / Liability problem Long term asset fixed and short term variable deposits No derivatives – yet! Gharrar? Financial Takaful? Warren Edwardes |
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Conclusion & SummaryLack of short term instruments Sukuks are medium plus term Not price stable or really liquid Shortage of credit lines Wanted an overnight Triple-A, market-sized, liquid, inter-bank market solution where institutions can park their reserves Warren Edwardes |
| «Islamic Liquidity Management Issues» | ||
