Risk management in Islamic vs. conventional banking

1. Risk management in Islamic vs. conventional banking • EXPLORING THE LATEST INNOVATIONS IN ISLAMIC CAPITAL FUNDINGS • Tuesday 5th OCTOBER 1999, Sheraton Imperial Hotel, Kuala Lumpur . • Warren Edwardes, Chief executive officer, Delphi Risk Management Limited • Email: we@dc3.co.uk • Website: www.dc3.co.uk Warren Edwardes

2. articles on Islamic banking on Delphi’s website are on: • "Competitive Pricing of Islamic Financial Products", • May 95, Horizon, Institute of Islamic Banking & Insurance, London: • www.dc3.co.uk/islamic.htm • "Islamic Banking” • 1st Quarter 99, Princeton Economics Journal, • www.dc3.co.uk/islamicbanking.htm Warren Edwardes

3. financial risk • some actions can protect • the same actions can destroy Warren Edwardes

4. financial risk - a film Warren Edwardes

5. A check-list of banking risk types • from my book: "Key Financial Instruments: understanding innovation in the world of derivatives" Dec. 99, Commissioned by Financial Times Prentice Hall ISBN 0273 63300 7 • discussion: Does Islamic banking risk differ from Western banking risk? • Comments invited and discussion will be uploaded onto • www.dc3.co.uk/islamicbanking1.htm Warren Edwardes

6. A list of Western banking risk types • To put it simply and directly, • if the bosses do not or cannot understand both the risks and rewards in their products, • their firm should not be in the business. - • William J. McDonough, President, Federal Reserve Bank of New York Warren Edwardes

7. banking risk types - 1-5 • Acquisition Risk • Careless Error Risk  • Competitive Risk  • Commodity Risk  • Communication Risk  Warren Edwardes

8. banking risk types - 6-10 • Country Risk  • Credit Risk  • Cultural Risk  • Currency Transaction Risk • Currency Translation Risk Warren Edwardes

9. banking risk types - 11-15 • Currency Economic Risk • Customer Satisfaction Risk  • Disaster Recovery Risk  • Economic Activity Risk  • Energy Price Risk  Warren Edwardes

10. banking risk types - 16-20 • Environment Risk  • Equity Market Risk  • Fraud (banker) Risk • Fraud (customer) Risk • Fraud (staff) Risk Warren Edwardes

11. banking risk types - 21-25 • Image / PR Risk  • Information Risk  • Inflation Risk  • Interest rate Risk  • Interaction Risk  Warren Edwardes

12. banking risk types - 26-30 • Language Risk  • Legal Risk  • Liquidity Risk  • Morbidity Risk  • Mortality Risk  Warren Edwardes

13. banking risk types - 31-35 • Operational Risk  • Performance Measurement Risk  • Political Risk  • Competence / Understanding  • Concentration of assets Risk Warren Edwardes

14. banking risk types - 36-40 • Concentration of liabilities Risk • Concentration of business type Risk • Convertibility Risk • Property (Real Estate) Risk  • Rating Agency Risk  Warren Edwardes

15. banking risk types - 41-45 • Regulatory Risk  • Religious Risk  • Resignation Risk  • Settlement Risk  • Systemic Risk  Warren Edwardes

16. banking risk types - 46-49 • Tax Risk  • Technological Risk  • Transport Risk  • Weather Risk  Warren Edwardes

17. banking risk types - 50 • No Risk • It’s impossible to take an unnecessary risk. • Because you only find out whether a risk was unnecessary • after you’ve taken it • Giovanni Agnelli, President FIAT Warren Edwardes

18. banking risk - a movie Warren Edwardes

19. Risk management in Islamic vs. conventional banking • EXPLORING THE LATEST INNOVATIONS IN ISLAMIC CAPITAL FUNDINGS • Tuesday 5th OCTOBER 1999, Sheraton Imperial Hotel, Kuala Lumpur . • Warren Edwardes, Chief executive officer, Delphi Risk Management Limited • Email: we@dc3.co.uk • Website: www.dc3.co.uk Warren Edwardes