STRONG LIQUIDITY MANAGEMENT INFRASTRUCTURE NEEDED FOR ISLAMIC FINANCE, SAYS ZETI

KUALA LUMPUR, Nov 24 (Bernama) -- The importance of a strong and well-developed liquidity management infrastructure for Islamic finance needs to be addressed urgently to enhance the ability of financial institutions to manage liquidity, said Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz.

She said the recent financial turmoil in advanced economies had clearly demonstrated the consequences of liquidity constraints.

In order to facilitate effective cross-border management of liquidity, Zeti said it required the development of shariah-compliant financial instruments and a well-developed international market infrastructure.

She said the Islamic Financial Services Board (IFSB), in collaboration with the Islamic Development Bank (IDB), had established a liquidity management task force to develop a liquidity management framework.

" We hope to have the framework in place sometime in 2010," she said at a Bank Negara conference on financial stability here today.

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