TRI22 Nov 2011 07:26
Thomson Reuters Launches World's First Islamic ...
Thomson Reuters works with leading Islamic finance institutions and banks to provide objective and dedicated benchmark for Shariah-compliant short-term interbank funding in Islamic finance industry
New York, London, Bahrain, November 22, 2011 - Thomson Reuters today launched the world's first Islamic finance benchmark rate, designed to provide an objective and dedicated indicator for the average expected return on Shariah-compliant short-term interbank funding. The Islamic Interbank Benchmark Rate (IIBR), announced at the 18th Annual World Islamic Banking Conference in Bahrain, uses the contributed rates of 16 Islamic banks and the Islamic sections of conventional banks to provide a reliable and much-needed alternative for pricing Islamic instruments to the conventional interest-based benchmarks used for mainstream finance.
"The delinking from conventional performance benchmarks started more than a dozen years ago and now we are extremely proud to offer the world's first Islamic pricing benchmark, the Thomson Reuters Islamic Interbank Benchmark Rate," said Rushdi Siddiqui, global head of Islamic finance, Thomson Reuters. "We have taken a collaborative approach as industry challenges are best solved by industry players working towards a common objective. The simplicity and robustness of the new benchmark's methodology, governance, and transparency, combined with the endorsement of many respected Islamic financial institutions and scholars, will result in a reliable and realistic benchmark that better measures cost of funding for Islamic financial institutions. Together we are taking an important step forward for Islamic finance authenticity."
The benchmark's ongoing implementation and integrity will be overseen by an Islamic Benchmark Committee of over 20 Islamic finance institutions, chaired by Dr. Nasser Saidi, chief economist of the Dubai International Financial Center (DIFC), and a Shariah Committee consisting of four world-respected Shariah scholars.