Jouahri advocates global cooperation to strengthen Islamic finance resilience

Abdellatif Jouahri, Governor of Bank Al-Maghrib (BAM), Morocco’s Central Bank, emphasized the importance of international collaboration in advancing Islamic finance during the 23rd Forum on Islamic Financial Stability held in Rabat.

The event, organized by BAM and the Islamic Financial Services Board (IFSB), was themed “Overcoming Challenges: Addressing Structural Vulnerabilities and Building Resilience Against Future Shocks.” Jouahri outlined four critical challenges confronting the sector: Sharia compliance, liquidity management, sustainable financing, and risks related to digitalization.

The role of cooperation in addressing challenges

Jouahri stressed that overcoming these challenges requires stronger global partnerships that respect international standards while accommodating national specificities. He praised the principle-based regulatory framework of Islamic finance, which allows countries to adapt global standards to their individual contexts.

Highlighting Morocco’s efforts, Jouahri noted the establishment of a centralized fatwa system, overseen by the Supreme Council of Ulemas, to ensure Sharia compliance of financial products. This system enhances public trust and reinforces the sector’s credibility.

Morocco’s progress in participatory finance

Since 2015, Morocco has worked to build a comprehensive regulatory, institutional, and fiscal framework to support Islamic finance, known locally as participatory finance. The sector now accounts for 2% of the country’s banking assets, driven by Bank Al-Maghrib’s collaborative efforts with stakeholders and its strategic roadmap.

The Supreme Council of Ulemas plays a pivotal role in ensuring governance and guiding the sector’s development. This approach has fostered a coherent and sustainable growth model tailored to Morocco’s unique financial landscape.

IFSB’s pivotal role in standard-setting

Jouahri commended the IFSB for its achievements since its inception in 2003, particularly in standard-setting, fostering regulatory cooperation, and facilitating dialogue among member institutions. He highlighted ongoing reforms aimed at addressing emerging challenges, strengthening institutional capacities, and providing sustained technical support.

The forum served as a platform for participants to anticipate future challenges, share practical experiences, and explore ways to enhance the resilience and sustainability of the Islamic finance industry.

A global gathering of Islamic finance leaders

The IFSB’s annual assemblies, held from July 1 to 3 in Rabat, brought together over 130 members from central banks, regulatory authorities, and industry stakeholders. The events included the 46th IFSB Council meeting, the 23rd General Assembly, and the 23rd Financial Stability Forum.

By hosting these events, Morocco reaffirmed its commitment to fostering international dialogue and addressing the structural vulnerabilities of the Islamic finance sector.