Asset and liability management of an interest free Islamic bank (Ph.D. Thesis)

Within the last two decades new types of financial intermediaries have emerged, including interest free Islamic financial institutions (IFIs). Economists, bankers, jurists of Islamic Jurisprudence and other academics have directed much of there focus towards providing descriptive analyses of how these systems operate, a theoretical framework derived from modern economic analysis methods, and empirical experimental evaluations. This study discusses the Asset and Liability Management (ALM) problem facing Islamic Banks (IBs), and constructs linear optimization models to help managers structure the assets, liabilities and capital accounts of their intermediaries. This study also examines how these institutions operate, identifying problems involved with these practices, which are accounted for in the modeling process. The application of the developed models to the data of two practicing IBs provides encouraging results for adopting quantitative problem solving methods to bank management s