Rethinking Islamic Finance: Markets, Regulations and Islamic Law

ISBN-13: 9781472477675 / Angielski / Twarda / 2018 / 112 str.

Saad Azmat; Ayesha Bhatti

Opis

The Islamic Finance industry has experienced significant expansion in the last decade with a growth of 15% per annum. Islamic banks' assets globally are forecasted to grow beyond $2 trillion and it is also projected that the Islamic finance industry will spearhead double-digit growth of about 20% between the years 2011 and 2015. Middle Eastern petro dollars, thriving Asian economics and a growing religious consciousness amongst the world's Muslim population together, has contributed to this phenomenal development of the industry. This growth, however, has not been without controversy. The Islamic finance industry's legitimacy and progress hinges upon the religious aspirations of its customers. Shariah compliance of the industry has been a point of contention. Dr Azmat, however, reconciles the differences between those who feel that the financial impact of Islamic financial structures is no different from conventional instruments and, hence, they should be considered non-Shariah compliant and those who advocate their Shariah legitimacy by pointing out their juristically sound underlying financing models. He argues that the financial impact of Islamic and conventional instruments has its origin in the way they are priced and structured. This similarity in the pricing mechanism and structures is an outcome of not the underlying Islamic financial models but the competitive environment where Islamic financial instruments compete. He examines what makes Islamic finance different and focuses on the differences that occur as a result of the adherence to Islamic law and considers the risk and reward implications of these Islamic features.

Spis treści

Acknowledgments; Preface; Chapter 1: Introduction; Chapter 2: The Paradox of Risk Sharing; 2.1 Introduction; 2.2 Islamic Instruments; 2.3 The Dominance of Debt Based Contracts; 2.4 Concluding Remarks; Chapter 3: Freedom From Interest; 3.1 Introduction; 3.2 Islamic Instrument Structures; 3.3 Convergence of Conventional and Islamic Banking Rates; 3.4 Concluding Remarks; Chapter 4: Financial Crisis and Islamic Finance; 4.1 Introduction; 4.2 Islamic Banking, Financial Intermediation, and Risk Sharing; 4.3 Implications During Financial Crisis; 4.4 Concluding Remarks; Chapter 5: The Little Difference Between Sukuk and Bonds; 5.1 Introduction; 5.2 Sukuk Structures; 5.3 Determinants of Credit Ratings of Islamic Bonds; 5.4 Concluding Remarks; Chapter 6: Issuer’s Choice of Islamic Bond Type; 6.1 Introduction; 6.2 Islamic Bond Structures; 6.3 Theories of Capital Structure; 6.4 Implications for Islamic Financing Choices; 6.5 Concluding Remarks; Chapter 7: Risk in Risk Sharing Sukuk; 7.1 Introduction; 7.2 Credit Risk in Risk Sharing Bonds; 7.3 Structural Credit Risk Models; 7.4 Concluding Remarks; Chapter 8: The Challenge of Shariah Compliance; 8.1 Introduction; 8.2 The Complexity of Shariah Compliant Structures; 8.3 The Agency Problem in Islamic Banks; 8.4 The Shariah Certification Dilemma; 8.5 The Role of the Regulator and Shariah Conscious Investor; 8.6 Concluding Remarks; Chapter 9: Replicating Conventional Finance; 9.1 Introduction; 9.2 Instrument Structures; 9.3 Behavioral Explanations; 9.4 Implications for Investor Preferences; 9.5 Concluding Remarks; Chapter 10: Can Islamic Banks Have Their Own Benchmark?; 10.1 Introduction; 10.2 Islamic Interbank Benchmark Rate (IIBR); 10.3 IIBR-LIBOR Benchmark Rates and Convergence; 10.4 Determinants of the ‘Piety Premium’; 10.5 Empirical Analysis; 10.6 Conclusion; Chapter 11: Islamic Versus Conventional Equities; 11.1 Introduction; 11.2 The Structure of Islamic Equities; 11.3 Diversification Benefits; 11.4 The Performance of Islamic Equities; 11.5 A Theoretical and Empirical Perspective; 11.6 Concluding Remarks; Chapter 12: Charity in Islamic Banks – A Distinguishing Feature?; 12.1 Introduction; 12.2 Penalty Versus Charity; 12.3 The Size of the Charity Pie; 12.4 Charity Contribution Versus Asset Size; 12.5 Social Distribution of Charity; 12.6 Concluding Remarks; Chapter 13: Rethinking Islamic Finance: The Limits of Our Understanding; 13.1 Introduction; 13.2 Pillars of Islamic Economics; 13.3 Barriers to Understanding Islamic Finance; 13.4 Concluding Remarks; Chapter 14: Rethinking Islamic Finance: An Ethical Perspective; 14.1 Introduction; 14.2 Rethinking Islamic Finance – An Ethical Framework; 14.3 Integrative Social Contract Theory; 14.4 Rethinking Islamic Finance Through ISCT; 14.5 Way Forward; 14.6 Concluding Remarks; Chapter 15: Conclusion; Bibliography; Index