1. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 Abdel-Maoula Chaar Rethinking the strategic reach of Sharia boards Abdel-Maoula Chaar AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012

2. Overview of the presentation  Sharia Supervisory boards as guardian of Sharia compliancy  Reputation and Sharia boards efficiency  The strategic reach of Sharia boards

3. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 Case Study: Lebanese Banks BANKTYPEYEAR Al Baraka – LebanonFully Fledged1979 Lebanese Islamic BankSubsidiary2005 BLOM DevelopmentSubsidiary2005 Arab Finance HouseFully Fledged2006

4. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 Sharia Boards primary task  Ensuring the Sharia compliency of the operations  Suggesting Sharia compliant solutions to the bank  Reducing the liability of newness by giving legitimacy to the banks

5. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 Assessing the scolars’ proficiency  Measuring the technical efficiency of the financial operations  Evaluating the soundness of the fatawas  Using the reputation as proxy

6. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 Evaluating reputation  Incapacity to assess the proficiency of scholars  Perceived reputation linked to pointers

7. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 Evaluating reputation Scholar Clients Bank1 REPUTATION ATTRACKS JOIN recruits Bank2 JOIN recruits + + + + + + +

8. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 Islamic banking in Lebanon  Population: 4 million  Religious factions:17  Number of muslims:60% app.  Main Muslim sects:Sunni / Shi’a

9. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 SSB Islamic Bank Legitimacy in local Sunni market Sunni Scholar Legitimacy in local Shi’a market Shi’a Scholar International Scholar Legitimacy in international and interbank markets Islamic banking in Lebanon

10. AM Chaar – Oman 1 st Islamic Finance & Banking Conference - Oman – January 2012 THANK YOU FOR YOUR ATTENTION