Leaders, scholars and professionals of the Islamic financial industry met on Saturday 25 Shawwal 1429H (25 October 2008 ) at the IDB Group Headquarters to discuss the escalating effects of the financial crisis and the role of the Islamic financial industry throughout these troubling times.

The forum formed a working group of experts to follow up and monitor implications of the economic crisis affecting Islamic banks and the economies of member countries.

Another task of the working group is to produce working papers identifying the position of the Islamic financial industry on how to deal with the current crisis affecting the world today. These papers would be provided to all official forums, meetings and symposia at local, regional and international levels.

The forum also suggested increasing the levels of cooperation between Islamic banking institutions to meet the challenges and develop a common vision for the Islamic banking industry. The panelists invited the forum to establish terms of reference for the Islamic banking industry at the national level and urged central banks to help support the organizational aspects of the industry.

The forum was inaugurated by Islamic Development Bank President Dr. Ahmad Mohamed Ali, who strongly expressed the need for Islamic financial institutions worldwide to collaborate on solutions to help alleviate the effects of the credit crisis.

Dr. Ali explained that the total financial losses of banks and financial institutions worldwide amounted to over USD 1.4 trillion at the end of September 2008 and that the amount is expected to increase. Additionally the global capital market has lost 30 percent of its value, or USD 18 trillion from the beginning of the year until the end of September 2008.

The President called for participants to seize this opportunity of the global crisis to establish global investment banks and spread the message of Islamic banking, presenting to the world the new vision in asset management, investment and product innovation which will add value to businesses.

Sheikh. Saleh Kamel, Chairman of the General Council of Islamic Banks and Financial Institutions and Saudi Chairman of the Islamic Chamber of Commerce, thanked IDB Group’s initiative to launch the forum during such a critical time saying it represents an extension of many successful initiatives already launched by the Bank. He explained that we are witnessing difficult times marking the fall of the capitalistic system and that the forum must engage in examining specialized Islamic alternatives for the benefit of all.

The forum featured several figureheads in the Islamic banking industry who explained the role of Islamic finance in the wake of the crisis, many saying that although Islamic banking is not part of the problem, it must attempt to provide viable solutions.

The panel included, Fajr Captial Executive Director Iqbal Khan and Dr. Umer Chapra Consultant at the Islamic Research and Training Institute,of the IDB Group, who spoke on the reasons for the global financial crisis. The forum included a session focused on the effects of the financial crisis on banking, investments and Islamic capital markets and another on the impact of the crisis on the insurance industry.