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Bridge over ocean
1 November 2014 Research Foundation

Islamic Finance: Ethics, Concepts, Practice

  1. Adeel Malik, PhD
  2. Usman Hayat, CFA

Islamic economic thought and finance are rooted in Islamic ethics, but their ideals and means are not exclusive to Islam. The principles of Islamic finance emphasize market-based risk sharing of financing that promotes asset and enterprise,

Islamic Finance: Ethics, Concepts, Practice Read the Literature Review

Islamic economic thought and finance are rooted in Islamic ethics, but their ideals and means are not exclusive to Islam. The principles of Islamic finance emphasize market-based risk sharing of financing that promotes asset and enterprise, deploys finance in the service of the real economy, and facilitates redistribution of wealth and opportunity. Modern Islamic financial practices, however, promote legal forms over economic substance, creating an expectations gap between theory and practice. In the wake of the global financial crisis of 2007–2008, the ideas underlying Islamic finance appeal to people who are concerned with the broad impact of finance on society.