An Overview of Islamic Finance

Mumtaz Hussain, Asghar Shahmoradi () and Rima Turk Ariss

No 2015/120, IMF Working Papers from International Monetary Fund

Abstract: Islamic finance has started to grow in international finance across the globe, with some concentration in few countries. Nearly 20 percent annual growth of Islamic finance in recent years seems to point to its resilience and broad appeal, partly owing to principles that govern Islamic financial activities, including equity, participation, and ownership. In theory, Islamic finance is resilient to shocks because of its emphasis on risk sharing, limits on excessive risk taking, and strong link to real activities. Empirical evidence on the stability of Islamic banks, however, is so far mixed. While these banks face similar risks as conventional banks do, they are also exposed to idiosyncratic risks, necessitating a tailoring of current risk management practices. The macroeconomic policy implications of the rapid expansion of Islamic finance are far reaching and need careful considerations.

Keywords: WP; bank; Shari'ah; monetary policy; banking assets; equity capital; Islamic Finance; Islamic Banking; Financial Stability; Sukuk; rate of return; bank management; profit sharing; profit-sharing financing; bank act; central bank certificate; profit share; assets data; conventional bank; Financial sector stability; Liquidity management; Open market operations; Global (search for similar items in EconPapers)
Pages: 35
Date: 2015-06-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=42976 (application/pdf)

Related works:
Journal Article: An Overview of Islamic Finance (2016)
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:imf:imfwpa:2015/120

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().