In fact, some financial innovation processes were triggered – among other considerations – in order to circumvent the existing regulation, particularly on capital requirements. This aspect is even more pressing in the current environment, with large and complex financial institutions operating across borders, under different national regulatory and supervisory regimes.
These sound principles are exemplified by the work that Professor Archer has done over the years, both with AAOIFI and with the IFSB. He has provided an example that everyone involved in the Islamic financial industry should seek to follow.