ISLAMIC FINANCE DOCTRINE: THE NATURE AND EVOLUTION (the end)
DOI:
https://doi.org/10.15407/economyukr.2018.02.065Keywords:
Islamic finance, Islamic banking, financial model, riba, gharar, maysir, halal, financial development data, international financeAbstract
The article identifies basic models of Islamic finance industry and provides a critical assessment (compared to conventional finance) оf mechanism of their functioning. Despite having obvious positive aspects, such as limitation of speculative or risky securitization, focusing on financing the real sector of economy and encouraging the direct interrelationship between financial and productive sectors, in our view, the mechanism of Islamic economics in some ways is at variance with a number of fundamental principles of effective economic activity.
Objective factors (demographic, political, economic) cause an increase of role and influence of the industry over regional financial markets and international finance and determine the relevance of further research in this area. Today, Islamic finance comprises such commercial areas as capital markets, asset management and insurance. They represent all segments of modern financial market – commercial banking, operations with equity and venture capital, trade financing, insurance and even financial hedging.
Only a small share of Muslims’ financial relations is provided in accordance with Islamic law. Under conditions of introducing the convenient, liquid and standardized financial instruments and further improvement of regulation for financial markets, redistribution of resources in favor of Islamic financial markets, as well as rapid growth of their share in international finance are expected.
References
Yueh L. Islamic banking: Growing fast but can it be more than a niche market? available at: www.bbc.com/news/business-28365639.
Islamic finance: Big interest, no interest. The Economist, September 13, 2014, available at: www.economist.com/news/finance-and-economics/21617014-market-islamic-financial-products-growing-fast-big-interest-no-interest.
Khan M., Ishaq M. Developments in Islamic Banking: the Case of Pakistan. Houndsmills, Basingstoke, Palgrave Macmillan, 2008.
Albalawi S. Banking system in islamic countries: Saudi Arabia and Egypt. A dissertation submitted to the school of law and the committee on graduate studies of Stanford University, available at: law.stanford.edu/wp-content/uploads/sites/default/files/biblio/108/144947/doc/slspublic/AlbalawiSuliman2006JSD.pdf.
Mozgovyi O.M., Subochev O.V., Yurkevych O.M. Osnovni modeli funktsionuvannya islams'kykh finansiv [The basic models of Islamic finance: a critical review]. Investytsii: praktyka ta dosvid - Investments: practice and experience, 2017, No. 6, pp. 20-25, available at: www.investplan.com.ua/?op=1&z=5422&i=3 [in Ukrainian].
Karim N., Tarazi M., Reilli Z. Islamic microfinance: an emerging market niche, available at: documents.worldbank.org/curated/en/500601468177566653/pdf/470010ENGLISH01PUBLIC10FocusNote149.pdf.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Economy of Ukraine
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.