Islamic finance's phenomenal growth owes to the Shariah compliant nature of its financial instruments. Shariah forbids the charging of interest (Riba) and instead promulgates risk-sharing and trade-based modes of financing. The Islamic financial industry has been subject to both critique and admiration. Critics argue that Islamic instruments (bearing debt-based structures) differ from their conventional counterparts only in legal lexicon and not in economic impact. The admirers argue that such instruments, irrespective of wider economic implications, rigorously comply with 'juristically sound' Islamic principles. This book aims to reconcile the above dispute. It argues that the financial impact of instruments is a consequence of the way they are priced and structured. The similarity in pricing and structures is an outcome not of the underlying Islamic financial modes but of the competitive environment in which Islamic instruments compete. Even risk-sharing and trade-based Islamic structures, if implemented in such an environment, would have a financial impact similar to that of conventional instruments. This book has a wider appeal for both academic and non-academic audiences. It can complement undergraduate and graduate courses as an additional reading on the intricacies of Islamic financial instruments and markets. For PhD students, it would help identify future research areas. To non-academics, it offers a deeper understanding regarding the working of the Islamic finance industry.
Description based upon print version of record. 14.3 Integrative social contract theory
Formatted Contents Note
Cover; Half Title; Series Page; Title Page; Copyright Page; Table of Contents; List of illustrations; Acknowledgements; Preface; 1. Introduction; 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; Notes; Bibliography; 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; Note; Bibliography; 4. Financial crisis and Islamic finance; 4.1 Introduction 4.2 Islamic banking, financial intermediation, and risk sharing4.3 Implications during financial crisis; 4.4 Concluding remarks; Notes; Bibliography; 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; Notes; Bibliography; 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; Notes; Bibliography; 7. Risk in risk-sharing Sukuk 7.1 Introduction7.2 Credit risk in risk-sharing bonds; 7.3 Structural credit risk models; 7.4 Concluding remarks; Notes; Bibliography; 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; Note; Bibliography; 9. Replicating conventional finance; 9.1 Introduction; 9.2 Instrument structures; 9.3 Behavioral explanations; 9.4 Implications for investor preferences 9.5 Concluding remarksNotes; Bibliography; 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 Concluding remarks; Notes; Bibliography; 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; Notes; Bibliography 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; Note; 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; Notes; Bibliography; 14. Rethinking Islamic finance: An ethical perspective; 14.1 Introduction; 14.2 Rethinking Islamic finance: an ethical framework
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OCLC-licensed vendor bibliographic record.