Towards an Economic Theory of Islamic Finance Regulation

Mabid Al-Jarhi

MPRA Paper from University Library of Munich, Germany

Abstract: Islamic finance has several comparative advantages over conventional finance. Since they are related to efficiency, stability and other macroeconomic benefits, they cannot be easily internalized by Islamic bankers. Islamic bankers have no incentive to stick to the Islamic finance paradigm and instead tend to mimic conventional finance. Regulation is therefore required to modify their behavior in order to allow the Islamic finance industry to enjoy its advantages. This paper attempts to modify the economic theory of bank regulations towards that aim.

Keywords: Islamic banking; Islamic finance; Islamic monetary and financial economics; regulations banking; finance (search for similar items in EconPapers)
JEL-codes: E4 E5 E6 (search for similar items in EconPapers)
Date: 2014, Revised 2014
New Economics Papers: this item is included in nep-cba and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Journal of Islamic Banking and Finance 1.2(2014): pp. 345-366

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:66744

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