Islamic Finance

The Masjid Council for Community Advancement (MACCA) provided

The objectives of the workshop were: (i) reviewing the understanding of Islamic financial intermediation and narrowing down what is meant by its real value, (ii) testing this understanding of Islamic financial intermediation and its real value against the world’s recent financial shortcomings and Islamic economic thinking about justice, equality, and wealth creation, (iii) discussing and applying Islamic financial intermediation with respect to each of: macro, institutional and consumer levels, (iv) discussing what immediate economic, legal, and regulatory reforms are needed to reposition t

The rapid growth of Islamic finance after 2000 has led to a new question of its practice. Critics of the current situation of Islamic finance contend that the newly developed Islamic financial products are not compatible with the ideal of Islamic economics, because these products are approved at patchwork screenings by a Sharia advisory board. After the middle of the first decade of the twenty-first century, in order to overcome this situation, several new ideas were proposed by those who aspire to the ideal of Islamic economics.

Corporate social responsibility has evolved dramatically over the past several years, and is now widely embraced by the corporate world not only as an ethical imperative but also as an economic necessity. Islamic finance, which espouses principles of equity and social development, has also found a more favorable and secular platform to convey and implement its objectives. While this presents many potential opportunities, there are still several challenges that require a sustainable and collaborative approach to find effective solutions.

Long and sustained periods of war, conflicts and neglect in several OIC (Organization of Islamic Cooperation) countries have rendered their economies and institutions dysfunctional. As a direct outcome, today OIC countries account for 61.5% of all displaced population in the world with more than 25 million displaced people. Therefore, there is a need for a paradigm shift in assumptions, approaches and narratives when addressing such challenges in OIC member states.

The Islamic Finance Project (IFP) of the Islamic Legal Studies Program (ILSP) of Harvard Law School, along with the London School of Economics and Political Science (LSE), co-hosted the fifth annual workshop on Islamic finance on 24 February 2011 at the LSE campus in London. This year, participants chose “Reappraising the Islamic Financial Sector” as the workshop topic. A diverse group of twenty-five individuals attended the workshop, including distinguished shari’a scholars, Islamic economists, academicians, bankers, lawyers and portfolio managers.