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Risk and Regulation of Islamic Banking

Edited by Mervyn K. Lewis, Emeritus Professor of the University of South Australia, Adelaide, and Emeritus Fellow of the Academy of the Social Sciences in Australia, Canberra, Mohamed Ariff, Chair of Economics and Finance, Sunway University and Shamsher Mohamad, Professor of Finance, International Centre for Education in Islamic Finance, Malaysia
From a single product offering in 1963, the Islamic financial services industry has grown to an estimated $1.6 trillion in assets. Products must comply with profit and risk-sharing criteria and regulations preventing banks from venturing into activities with high risk and excessive uncertainty. This timely volume analyses these matters and considers the range of new products, discussing both conceptual and practical dimensions. It connects Islamic finance to the mainstream theoretical literature on financial intermediation while also exploring its differences. The expert contributors also examine why an ethical foundation is important and why the system requires well-thought-out regulations to ensure outcomes that protect the community’s well-being.
Extent: 336 pp
Hardback Price: $145.00 Web: $130.50
Publication Date: 2014
ISBN: 978 1 78347 612 1
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  • Asian Studies
  • Asian Economics
  • Economics and Finance
  • Asian Economics
  • Financial Economics and Regulation
  • Islamic Economics and Finance
  • Money and Banking
From a single product offering in 1963, the Islamic financial services industry has grown to an estimated $1.6 trillion in assets. Products must comply with profit and risk-sharing criteria and regulations preventing banks from venturing into activities with high risk and excessive uncertainty. This timely volume analyses these matters and considers the range of new products, discussing both conceptual and practical dimensions.

The expert contributors examine why an ethical foundation is important and why the system requires well-thought-out regulations to ensure outcomes that protect the community’s well-being. The volume explores in detail the nature of Islamic banking products and their risk elements, how the system differs from conventional banking in theory and practice, and how Islamic financial institutions are rated and regulated. It also connects Islamic finance to the mainstream theoretical literature on financial intermediation whilst exploring its differences.

Offering a detailed examination of the risk and regulation of Islamic banking products, this unique volume will be of great interest to Islamic and Western universities with courses in Islamic studies and finance. Islamic research centres and training institutes, central banks and Islamic regulatory agencies will also find this a valuable resource.
Contributors: M. Ariff, M.A.M. Ayob, O.I. Bacha, Z. Hassan, M. Iqbal, A. Kaleem, M.A Laldin, Y.K.Leng, M.K.Lewis, A. Mirakhor, S. Mohamad, M.Z. Othman, S.P. Parashar, V. Promwichit, M. Safari, M.T. Skully, R. Zaman
Contents:

1. Issues in the Risk and Regulation of Islamic Banking
Mohamed Ariff, Mervyn K. Lewis and Mohamad Shamsher

PART I THEORIES OF ISLAMIC BANKING
2. A Theoretical Perspective on Islamic Banking and Financial Intermediation
Mervyn K. Lewis

3. Objectives of Islamic Banking: a Theoretical Discusson
Akram Laldeen

4. Similarities and Differences in Islamic and Conventional Banking
Mohamed Ariff and Mervyn K. Lewis

5. Towards Making ‘Islamic’ Banking Islamic
Munawar Iqbal

Part II: Regulation of Islamic banking
6. Foundations of Risk-Sharing Finance: An Islamic View
Abbas Mirakhor

7. The Role of the Central Bank in Dual Banking Malaysia
Mohamad Shamsher and Veelaiporn Promwichit

8. A Case Study of the Liquidity Management Centre in Bahrain
Sat Paul Parashar

Part III: BANKING PRODUCTS AND MARKETS
9. Non-interest Financing Arrangements in Three Abrahamic Religions
Ahmad Kaleem and Mervyn K. Lewis

10. Need for Pricing Information to Value Sukuk Securities
Meor Ayeob

11. Major Islamic Banking Products and Markets: A Preliminary Analysis
Mohamed Ariff and Mesam Safari

12. Financial Market Operations in the United States: Ethical Issues and Lessons for Islamic Banking
Raquibuz Zaman

PART IV: PRACTICAL ISSUES
13. Challenges in Rating Islamic Financial Institutions
Yeoh Kim Leng and M.Z. Othman

14. Islamic Norms, Excel Time Value Formula and Housing Finance Models
Zubair Hasan

15. Islamic Finance in Australia
Michael Skully

16. Risk Management and Derivatives in Islamic Fnance
I. Bacha Obiyathullah

17. Development Needs of the Islamic Banking Industry
Mohamed Ariff, Mervyn K. Lewis and Mohamad Shamsher

Index