The World Bank launched its Global Islamic Finance Development Centre at Borsa İstanbul premises on 30 October. This is the World Bank’s only representation office on Islamic finance. This Centre was launched as a result of the cooperation of the World Bank and Turkey’s Undersecretariat of Treasury.
In his keynote speech, Deputy Prime Minister Ali Babacan said, “The efforts to launch this Centre started off two years ago. We agreed with the World Bank that locating the Centre in İstanbul will have a special meaning. So, we decided to establish the Centre under the roof of Borsa İstanbul. This decision is based on the idea to emphasise Borsa İstanbul’s regional power. We provided the required infrastructure. The Centre will offer services including information sharing on the development of Islamic finance, technical assistance and consultancy, harmonisation, and encouraging information sharing.”
Ali Babacan underlined that there is no legal and practical mechanism to which all countries related with Islamic finance are subject, and added, “This will be one of the key areas of research of this Centre. These ideas will be studied technically here. The World Bank’s Centre in İstanbul is really very important. Islamic financial products, particularly lease certificates became popular in Southeast Asia first, followed by the Gulf region. We lag behind a little. However, we are confident that the recent efforts will lead İstanbul to be more closely monitored in terms of Islamic finance. It is a great honour for us that a prestigious organisation such as the World Bank, with 188 member states, has chosen Turkey. I do hope that this Centre will be one that will support all global efforts”.
A SYMBOL OF COMMON AIM
The World Bank President Dr. Jim Yong Kim said in his keynote speech that the Development Centre under the roof of Borsa İstanbul is a reflection of the efforts to globally improve Islamic finance and contribute to wealth.
Jim Yong Kim said, “I am very pleased to launch the World Bank Global Islamic Finance Centre today. This Centre is an important symbol of our common aim of improving Islamic finance globally. The Centre will at the same time contribute to fighting poverty and sharing the wealth in our member states. With global access, the Centre is the result of the joint work of the Turkish government, Turkish private sector and the World Bank. The brilliant recent growth and globalisation of Islamic finance has led the total size of the global Islamic financial assets to increase to USD 1.5 trillion. Many countries, mainly Bahrain, Indonesia and Malaysia have a large Islamic finance sector while others such as Luxembourg and England are making determined steps to improve these financing instruments.”
Jim Yong Kim said that in consideration of the increasing importance of Islamic finance and the potential contribution it will make to fighting poverty, the World Bank cooperates with numerous stakeholders in the sector, and went on to say, “I do hope that this Centre will be an important cornerstone with respect to the efforts we are making. Within this framework, Turkey will work as a Data Dissemination Centre and lead the design and delivery of technical assistance and consultancy services that are up to the latest technology. We can together create and spread information that will make Islamic finance more important for growth and development. I believe that this system and this Centre will be very successful since we will work with Turkish officials. I know that Turkish officials keep their promises.”
A GLOBAL CENTRE
Following the ceremony, Borsa İstanbul Chairman & CEO Dr. İbrahim M. Turhan made comments on the World Bank Global Financial Centre. Turhan said, “This Centre is established with a vision of a global centre that leads the development of Islamic finance and that develops Islamic finance products, and is the World Bank’s only representation office on Islamic finance”.
Dr. Turhan pointed out to the fact that Islamic financial products are founded on sound financial principles including investing in a real asset, basing the yield on production or trade income rather than interest, and displaying risk and yield transparently, and added that, as a newly developing segment, it attracts significant attention from the economy circles.
Dr. Turhan went on to say, “During the global crisis process, Islamic financial products offer a remarkable alternative for macro-prudential risk management and infrastructure investment financing. As Borsa İstanbul, we accept it as part of our mission to encourage the improvement and spreading of Islamic financial products in Turkey, and to support activities that contribute to raising awareness in Turkey and our region.
The Centre will operate with the support of Borsa İstanbul, Turkish Treasury Undersecretariat, Banking Regulation and Supervision Agency, Capital Markets Board of Turkey, and Central Bank of the Republic of Turkey under the leadership of the World Bank.
INFORMATION SHARING
The Centre is expected to lead developments in the global Islamic finance area and be active particularly in the Middle East, North Africa, Europe, and Central Asia. In addition to contributing to information sharing, the Centre aims to ensure harmonisation in the sector, strengthened corporate infrastructure, and enhanced awareness.
Besides Turkey’s Deputy Prime Minister Ali Babacan, World Bank President Dr. Jim Yong Kim, and Borsa İstanbul Chairman & CEO Dr. İbrahim M. Turhan, the press conference organised on the occasion of the opening ceremony was participated by Turkey’s Treasury Undersecretary İbrahim Halil Çanakçı, Central Bank of Turkey Deputy Governor Murat Çetinkaya, Capital Markets Board Chairman Vahdettin Ertaş, Banking Regulation and Supervision Authority Chairman Mukim Öztekin, and Association of Participation Banks of Turkey Chairman Ufuk Uyan.