Islamic Finance: Law, Economics, and Practice

by Mahmoud A. El-Gamal

Overview

This book provides an overview of the practice of Islamic finance and the historical roots that define its modes of operation. The focus of the book is analytical and forward-looking. It shows that Islamic finance exists mainly as a form of rent-seeking legal-arbitrage. In every aspect of finance — from personal loans to investment banking, and from market structure to corporate governance — Islamic finance aims to replicate in Islamic forms the substantive functions of contemporary financial instruments, markets, and institutions. By attempting to replicate the substance of contemporary financial practice using pre-modern contract forms, Islamic finance has arguably failed to serve the objectives of Islamic law. This book proposes refocusing Islamic finance on substance rather than form. This approach would entail abandoning the paradigm of “Islamization” of every financial practice. It would also entail reorienting the brand-name of Islamic finance to emphasize issues of community banking, micro-finance, and socially responsible investment.

Product Details

ISBN-13:	9780521741262
Publisher:	Cambridge University Press
Publication date:	11/24/2008
Edition description:	New Edition
Pages:	240
Product dimensions:	6.00(w) x 8.90(h) x 0.70(d)

About the Author

Mahmoud A. El-Gamal is Professor of Economics and Statistics at Rice University, where he holds the endowed Chair in Islamic Economics, Finance, and Management. Professor El-Gamal has also served in the Middle East Department of the International Monetary Fund (1995–6), and was the first Scholar in Residence on Islamic Finance at the U.S. Department of the Treasury in 2004. He has published extensively in the areas of econometrics, finance, experimental economics, and Islamic law and finance.

Table of Contents

1. Introduction; 2. Jurisprudence and arbitrage; 3. Two major prohibitions: Riba and Gharar; 4. Sale-based Islamic finance; 5. Derivative-like sales: Salam, Istisma' and 'Urbun; 6. Leasing, securitization and Sukuk; 7. Partnerships and equity investment; 8. Islamic financial institutions; 9. Governance and regulatory solutions in mutuality; 10. Beyond Shari'a arbitrage; Conclusion.

What People are Saying About This

From the Publisher

"This book is by far one of the best that has been published on the topic of Islamic finance and banking." - Choice

"This is a timely book providing an analytical critique of contemporary Islamic Finance by a leading Muslim scholar.... an important contribution." - International Journal of Middle East Studies

Editorial Reviews

"This book is by far one of the best that has been published on the topic of Islamic finance and banking." - Choice

"This is a timely book providing an analytical critique of contemporary Islamic Finance by a leading Muslim scholar.... an important contribution." - International Journal of Middle East Studies

From the Publisher