IFSB Role in Preventing Financial Crises and Islamic Ethics Perspective

  • Adi Rahmannur Ibnu Djuanda University
Keywords: ifsb, iIslamic ethics, moral hazard


 Islamic Financial Services Board (IFSB) acts as the international regulatory and supervision framework for Islamic financial services institution. Though Islamic financial industries keep growing in promising pace, they still experience some criticisms; one of them is an underestimate claim regarding Islamic finance soundness and safety which notoriously promoted to be better than the non-Islamic is lack of evidence. This claim, however, serves as the early warning to the trajectory of Islamic finance development and global vision which seems to employ. Thus, this study addresses this challenge by analyzing IFSB’s published frameworks based on the Islamic ethics. This is a descriptive inquiry which employed library-study approach. The result of this study suggests that IFSB should be more focus on human adversaries since moral hazard, either done collectively or individually, plays determining role in some systemic financial crises in the last two decades. The suggested action plan is discussed in the conclusion section.


Abdallah, S. (2010) ‘Islamic Ethics: An Exposition for Resolving ICT Ethical Dilemmas’, Journal of Information, Communication and Ethics in Society, 8(3), pp. 289–301.

Basel Committee (2013) Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools, Basel Committee on Banking Supervision. Basel.

Boatright, J. R. (2011) Finance Ethics: Critical Issues in Theory and Practice, Finance Ethics: Critical Issues in Theory and Practice. New Jersey: John Wiley & Sons, Inc.

Bulatova, J. (2016) ‘Morality as an Index of Mental Health of the Organization : Building a Model of Healthy Leadership’, in de Arruda, M. C. and Rok, B. (eds) Understanding Ethics and Responsibilities in a Global World. Springer, pp. 105–122.

Fang, E. S. and Foucart, R. (2014) ‘Western Financial Agents and Islamic Ethics’, Journal of Business Ethics, 123(3), pp. 475–491.

Hallaq, W. B. (2009) An Introduction to Islamic Law. New York: Cambridge University Press.

Iqbal, Z. and Mirakhor, A. (2017) Ethical Dimensions of Islamic Finance: Theory and Practice. Palgrave - MacMilan.

Islamic Financial Services Board (2013) Revised Capital Adequacy Standard for Institutions Offering Islamic Financial Services [Excluding Islamic Insurance (Takāful) Institutions and Islamic Collective Investment Schemes]. Kuala Lumpur.

Kasim, N., NuHtay, S. N. and Salman, S. A. (2013) ‘Comparative Analysis on AAOIFI , IFSB and BNM Shari ’ ah Governance Faculty of Accountancy’, International Journal of Business and Social Science, 4(15), pp. 220–227.

Kernohan, A. (2015) Business Ethics : An Interactive Introduction. Broadview Press.

Khan, F. (2010) ‘How “Islamic” is Islamic Banking ?’, Journal of Economic Behavior & Organization, 76(3), pp. 805–820.

Mishkin, F. (2004) The Economics Of Money, Banking, And Financial Markets. 7th edn. New York: Addison-Wesley.

Previdelli, M. de F. S. do C. and de Souza, L. E. do S. (2018) ‘IMF, BIS, and World Bank: On the Intra-institutional Articulation of the International Financial System’, Management and Economics Research Journal, 4(1), pp. 48–59.

Reinhart, K. (1983) ‘Islamic Law As Islamic Ethics’, The Journal of Religious Ethics, 11(2), pp. 186–203.

Rizk, R. R. (2008) ‘Back to Basics : An Islamic Perspective on Business and Work Ethics’, Social Responsibility Journal, 4(1/2), pp. 246–254.

Taswan (2011) Kepemilikan Bank, Kepatuhan Regulasi dan Disiplin Pasar : Kontrol Risiko Perbankan dan Moral Hazard Terkait Posisi Charter Value Pada Periode Penjaminan Simpanan Implisit dan Eksplisit. Gadjah Mada University.

Visser, H. (2009) Islamic Finance Principles and Practice, Edward Elgar. Clatenham: Edward Elgar Publication ltd.

Weiss, J. W. (2014) Business Ethics : A Stakeholder and Issues Management Approach. 6th
ed.California: Berrett-Koehler Publisher Inc.
How to Cite
Ibnu, A. (2018). IFSB Role in Preventing Financial Crises and Islamic Ethics Perspective. Ijtimā’iyya: Journal of Muslim Society Research, 3(2), 150-169. https://doi.org/https://doi.org/10.24090/ijtimaiyya.v3i2.1917