Bloomsbury Qatar Foundation Journals

The changing political scene in North Africa is resulting in a much greater interest in Islamic finance and what it has to offer. The modern practice of Islamic finance started in Egypt with the Mit Ghamr experiment of 1963. This project had a strong focus on development and provided micro-savings and micro-loans before microfinance was conceptualized as such in the 1970s. Nowadays, Egypt has the potential to develop a new homegrown model focused on development that could avoid cosmetic “Islamic” finance.

Apart from offering significant economic prospects, the staggering growth and development has posed new challenges to global supervisory authorities and to Islamic banks that encountered new challenges in managing risks, particularly related to maintaining operational soundness of IFIs. Two very crucial areas yet to be thoroughly developed in an integrated manner are financial stability and risk management.

This volume titled Ethics, Governance, and Regulation in Islamic Finance is an attempt to highlight a few important inter-related topics. It consists of 14 papers that focus on their numerous dimensions. The papers were selected from the 8th International Conference on Islamic Economics and Finance held in Doha, 19–21 December 2011, and from the 9th International Conference on Islamic Economics and Finance held in Istanbul, 9–11 September 2013. 

PART 1: SHARIAH ISSUES AND BUSINESS ETHICS IN ISLAMIC FINANCE

In most parts of the world, Islamic banks operate in a dual banking system together with conventional banks. Researchers may be curious to explore whether operating in a dual banking system affects the type of Islamic banks that exist in the economy and the kind of products that they offer. In light of the recent LIBOR scandals, debates surrounding benchmarking of Islamic products will recapture the attention of researchers; hence, product development in Islamic banking will also remain an important area.

The need for developing inclusive and sustainable Islamic economic and financial systems become very important. The early opinion building as well as the later technical literature on the subject of Islamic economics has greatly contributed to the promotion of this line of inquiry. However, Islamic economics has not yet achieved a level to become a discipline that is able to create a paradigm shift in the way of thinking and policymaking. The need is therefore not only to develop the theory but also to link the theory with policymaking.