Does Islamic Finance Make the World Economically and Financially Safer? Islamic Finance and Its Implications on Sustainable Economic Growth

Developments in the Islamic finance industry in the last two decades have significant impact on both economies of Muslim geography and global financial markets. These developments starting from the introduction of Islamic Finance indices in conventional financial markets in the equity side of these capital markets, followed by financial innovations, such as seminal sukūk issuances captured the attention of the global financial system. This continuous growth potentially has had two main influences in the global financial system. First; the development of Islamic finance has added new and novel veins supporting the global financial markets, increasing the potential pool supporting the system. Second; investors and entrepreneurs with solid business ideas and innovations, but also with the moral and ethical concerns have gained an opportunity to provide and maintain a financing resource for their businesses. This inevitably suggests additional support for the real economies. This paper inv