Islamic Finance, Consumer Protection, and Financial Stability

Inutu Lukonga

No 2015/107, IMF Working Papers from International Monetary Fund

Abstract: Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.

Keywords: WP; consumer vulnerability; banking sector; central bank; investor confidence; Shari'ah-complaint Sukuk; Islamic Finance; Consumer Protection; Financial Stability; Sukuk holder; protection of Sukuk investor; investor protection; Shar'iah principle; liquidation process Sukuk; investor right; asset-backed Sukuk; consumer awareness; Islamic banking; Legal support in revenue administration; Deposit insurance; Global (search for similar items in EconPapers)
Pages: 39
Date: 2015-05-18
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Citations: View citations in EconPapers (2)

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