Islamic Finance
Law, Economics, and Practice

This book provides an overview of the practice of Islamic finance.

Mahmoud A. El-Gamal (Author)

9780521741262, Cambridge University Press

Paperback, published 24 November 2008

240 pages, 3 tables
22.8 x 15.3 x 1.5 cm, 0.34 kg

'The first book on Islamic finance written in the law and economics tradition, Professor El-Gamal's contribution adds a new dimension to the ongoing debate on the future of the Islamic financial industry. Whatever the reader's judgment, the gain in insight is certain, and that matters most. Those eager to see the full potential of Islamic finance realized, and the provisions in classical Islamic jurisprudence relating to finance given new interpretations that help universalize them, can hardly miss reading this book.' Mohammed Nejatullah Siddiqi, Former Director, Institute of Islamic Studies, Aligarh Muslim University

This book provides an overview of the practice of Islamic finance and the historical roots that define its modes of operation. The focus of the book is analytical and forward-looking. It shows that Islamic finance exists mainly as a form of rent-seeking legal-arbitrage. In every aspect of finance - from personal loans to investment banking, and from market structure to corporate governance - Islamic finance aims to replicate in Islamic forms the substantive functions of contemporary financial instruments, markets, and institutions. By attempting to replicate the substance of contemporary financial practice using pre-modern contract forms, Islamic finance has arguably failed to serve the objectives of Islamic law. This book proposes refocusing Islamic finance on substance rather than form. This approach would entail abandoning the paradigm of 'Islamization' of every financial practice. It would also entail reorienting the brand-name of Islamic finance to emphasize issues of community banking, micro-finance, and socially responsible investment.

1. Introduction
2. Jurisprudence and arbitrage
3. Two major prohibitions: Riba and Gharar
4. Sale-based Islamic finance
5. Derivative-like sales: Salam, Istisma' and 'Urbun
6. Leasing, securitization and Sukuk
7. Partnerships and equity investment
8. Islamic financial institutions
9. Governance and regulatory solutions in mutuality
10. Beyond Shari'a arbitrage
Conclusion.

Subject Areas: Finance [KFF], Microeconomics [KCC], Political science & theory [JPA], Regional studies [GTB]