Fitch ratings boost for IDB

In response to the Islamic Development Bank's (IDB) strong capitalization, high liquidity, protection against credit risk, etc, Fitch has upgraded its long-term rating from A+ to AA-, and for the first time ever has assigned it a short-term rating of F1+. Fitch has identified some issues that the IDB needs to work on. There is a conflict between profitability and the bank's mission to build up sufficient reserves for development. A criticism of the IDB is that, being very liquid, it may be too conservative and not taking enough risks? On which criteria are its achievements in development being judged? Rating agencies ought not to judge Islamic financial institutions in the same way as financial institutions – criteria such as shari`a compliance ought also to be taken into account.