Islamic finance can boost stability – IMF

KUWAIT CITY: The fast growing, Sharia-compliant Islamic finance industry has the potential to promote financial stability because of its risk-sharing and asset-backed features, International Monetary Fund (IMF) managing director Christine Lagarde said on Wednesday.

“Islamic finance has, in principle, the potential to promote financial stability because its risk-sharing feature reduces leverage and its financing is asset-backed and thus fully collateralized,” Lagarde told an Islamic finance conference in Kuwait.