Cooperation between financial institutions in member countries to finance trade and to support local Islamic banks: the role of IDB

The Organization of the Islamic Conference (OIC) has 42 member-states. Individual nations are rarely self-sufficient, but as a unit they are self-sufficient in several of sectors. The 1974 Lahore Declaration articulated the necessity of cooperation among Muslim states. Increased financial cooperation among Muslim countries can promote trade and reduce deficits. Four types of financial institutions exist in OIC states: central banks and monetary agencies; national development banks; local Islamic banks; and national/regional bodies. Central bank leaders meet to discuss how the financial institutions of the Muslim world can cooperate. The Islamic Development Bank (IDB) attends these gatherings. National development banks are invited to IDB Governor's meetings and are issued equity for local ventures. The IDB supports local Islamic banks with investments. Both the IDB and Islamic banks participate in profit-sharing activities. The IDB helps transfer funds from one Islamic bank t