Risk sharing and risk shifting: An historical perspective

Murat Cizakca

Borsa Istanbul Review, 2014, vol. 14, issue 4, 191-195

Abstract: Islam prohibits risk shifting and encourages risk sharing. Consequently, Muslims have developed over the centuries a highly sophisticated know-how of risk sharing partnerships which was the envy of the world. When Europe borrowed this know-how from the 10th century onwards, it entered into the era of “commercial revolution”. 13th century Venice, 19th century Germany and the 20th century United States are the three western cases presented in this article, which demonstrate the dramatic achievements of risk sharing in the West. Thus, the wisdom of the Islamic prohibition is confirmed by these Western examples. The paper then examines how Muslims can re-introduce risk sharing techniques into the modern Islamic finance.

Keywords: Risk sharing; Risk shifting; Islamic finance; Commercial revolution; Gerschenkron hypothesis; Venture capital; Gharar (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214845014000258 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bor:bistre:v:14:y:2014:i:4:p:191-195

Access Statistics for this article

More articles in Borsa Istanbul Review from Research and Business Development Department, Borsa Istanbul Contact information at EDIRC.
Bibliographic data for series maintained by Ahmet Palu ().