National and Global Islamic Financial Architecture:
Problems and Possible Solutions for the OIC Member Countries
206
The Liquidity Management Centre (LMC) helps Islamic financial institutions manage their
liquidity mismatch by providing short and medium term Shariah compliant liquidity
instruments. The International Islamic Liquidity Management Corp. (IILM) issues short-term
Shari’ah-compliant financial instruments to facilitate effective cross-border Islamic liquidity
management. IIFM has developed some templates for products that can be used in money
market transactions. IFSB has published a Technical Note (TN-1) on liquidity issues that covers
the development of Islamic money markets. However, there are no specific models or
templates for Islamic inter-bank money markets developed. Similarly, though the IFSB has
published a working paper that discusses different models of Shariah compliant LOLR facilities,
no guidelines or standards have been published yet.
Table ‎6.15: International Institutions Related to Liquidity Infrastructure
No. Institutional Elements Existing
Institutions
Role and Responsibilities
4.1 Shariah compliant
liquidity instruments
 IIFM
 LMC
 IILM
 Develop and Issue short-term Islamic
instrument for cross-border liquidity
management
4.2 Islamic money market  IFSB  Develop templates for Islamic money
markets
4.3 Lender of the last resort
(LOLR)
6.3.5. Information Infrastructure
AAOIFI is responsible for developing accounting, auditing and governance standards for
Islamic financial institutions and has issued 27 financial accounting standards, 7 governance
standards, 2 codes of ethics and one guidance note. IFSB has also issued a standard on
disclosure and transparency (IFSB-4) for Islamic financial institutions. The Islamic
International Rating Agency (IIRA) provides ratings of Islamic financial institutions and Islamic
capital market products. IIRA is the only international rating agency that also carries out the
Shari’ah Quality Rating (SQR) to assess the status of Shariah compliance in different financial
institutions.
Table ‎6.16: International Institutions Related to Information Infrastructure
No. Institutional
Elements
Existing
Institutions
Role and Responsibilities
4.1 Accounting and
auditing standards
 AAOIFI  Develop and publish accounting and
auditing standards for Islamic finance
4.2 Disclosure and
Transparency
 AAOIFI
 IFSB
 Develop and publish disclosure and
transparency standards for Islamic
finance
4.3 Rating agencies  IIRA  Provides credit and Shariah ratings for
Islamic financial institutions and
instruments