Islamic Finance and Financial Stability: A Review of Theoretical Literature التمويل الإسلامي والاستقرار المالي: مراجعة الأدبيات النظرية

Ahmed Belouafi ()
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Ahmed Belouafi: Islamic Economics Institute King Abdulaziz University, Jeddah, Saudi Arabia

No 45, Papers or presentations in the in-house seminars conducted by the Islamic Economics Institute, KAAU. from Islamic Economics Institute, King Abdulaziz University

Abstract: This paper provides an analytical review of about fifteen theoretical investigations that had examined the stability of the Islamic Financial System (IFS) vis-à-vis its conventional interest-based counterpart. The research aims at discussing the main findings and conclu-sions that the reviewed literature arrived at. A brief account of how financial stability has been defined, in the conventional literature, has also been explored. The results indicate that there is an almost general ‘consensus’ among these treatises on the ‘superiority’ of an Islamic financial system based on equity and participatory modes of financing with respect to financial stability. To what extent are these claims robust? And what are the underlying assumptions behind the development of such syntheses? These and other important related questions form the basis of the discussion and analysis in this study.

Keywords: Islamic finance; financial stability; financial instability; interest-based system (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-02
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Citations: View citations in EconPapers (1)

Published in Islamic Economics Institute (IEI) Working Paper Series, Number 3

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Persistent link: https://EconPapers.repec.org/RePEc:abd:ieiwps:45

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