Islamic securitisation: An ethical remedy to incentive problems?

Andreas Jobst ()

International Journal of Monetary Economics and Finance, 2009, vol. 2, issue 3/4, 348-365

Abstract: Islamic securitisation in the form of sukuk has grown into a notable segment of global structured finance over the recent past. This paper surveys the unique structural features of the sukuk market and assesses the resilience of shari'ah compliance to the adverse effects of conflicts of interest that became apparent in the US subprime mortgage crisis and the subsequent fallout in global financial markets. This examination also considers recent regulatory changes to the definition of sukuk and current policy considerations of alternative forms of capital-market based refinancing techniques, such as covered mortgage bonds, and the way they relate to Islamic securitisation. The paper concludes with a brief outlook on future challenges and developments in the sukuk market.

Keywords: Islamic finance; Islamic securitisation; structured finance; asset-backed; asset-based; sukuk market; ijara; shariah compliance; covered bonds; risk management; ethics; regulatory changes; refinancing; mortgage bonds. (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (3)

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