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More About This Title Intermediate Islamic Finance
English
Intermediate Islamic Finance: Theory and Practice fills the gap for students and professionals who are already familiar with the fundamentals of Islamic finance, but would like to gain an enhanced understanding of Islamic finance theories and practices. This comprehensive text provides you with coverage of global developments and describes the role of Islamic finance within the global finance community to guide you in your understanding of this important aspect of the international financial landscape. The book references advance concepts and specific problems in the practice of Islamic finance, provides suggested further readings for each chapter, offers details of advanced analysis, and presents key data in visual form via graphs, figures, and tables.
Profound changes have taken place in the financial landscape over the past few decades, including major innovations in financial instruments and substantial changes in regulation. With global financial markets becoming increasingly important players in the industry, it is critical that today's financial professionals understand the essence and implications of key Islamic finance theories and practices.
- Build upon your fundamental understanding of Islamic finance
- Explore some areas of convergence and conflict between Islamic finance and conventional finance
- Strengthen the harmony between Islamic and conventional finance theories and their applications
- Prepare for a well-rounded career in finance by better understanding how Islamic finance principles apply
Intermediate Islamic Finance: Theory and Practice is an essential text for graduate and post-graduate finance students, economists, researchers, bankers, financial regulators, policymakers, and members of the business community who want to develop a deeper understanding of Islamic finance theories and practices.
English
Nabil Maghrebi is Professor of Finance at Wakayama University, Visiting Professor at Osaka University, and previously Research Fellow at the International Institute for Advanced Studies, Kyoto, Japan. His publications focus on international financial markets and Islamic finance.
Abbas Mirakhor is the First Holder of the Chair of Islamic Finance at the International Centre for Education in Islamic Finance (INCEIF). He is the author of An Introduction to Islamic Finance,Risk Sharing in Finance, and The Stability of Islamic Finance.
Zamir Iqbal is Lead Financial Sector Specialist at the Finance and Markets Global Practice of the World Bank and heads the World Bank Global Islamic Finance Development Center in Istanbul. He is co-author of An Introduction to Islamic Finance, Economic Development and Islamic Finance, and Risk Sharing in Finance.
English
Preface xi
About the Authors xix
CHAPTER 1 Epistemology of Finance 1
Epistemology of an Ideal Conventional Financial System 3
Epistemology of an Ideal Islamic Financial System 17
Risk-Sharing Finance in a World of Uncertainty 27
Summary and Conclusions 41
CHAPTER 2 Finance and Ethics 47
Renewed Interest in Ethical Finance 48
Embedded Ethical Issues in Financial Theory 50
Cases of Ethical Issues in Finance 51
Virtue Ethics Model 55
Islamic Framework of Business Ethics 58
Summary and Conclusions 69
CHAPTER 3 The Analytics of Finance 71
The Theory of Interest 73
The Concept of Time Value 76
Utility Theory, Risk Aversion, and Risk Premium 87
The Individual’s Optimal Consumption and Portfolio Choices 95
Market Efficiency and the Random-Walk Hypothesis 105
Risk Sharing in Finance 108
Summary and Conclusions 111
CHAPTER 4 Equity, Efficiency, and Firm Behavior 113
Methodological Issues in Islamic Economics 114
Theories of Firm Behavior in Islamic Economics 116
The Profit-Sharing Principle 122
A Theoretical Construct of Equity and Allocative Efficiency 125
Summary and Conclusions 126
CHAPTER 5 Asset Pricing and Corporate Finance 129
Capital Asset Pricing Model 130
Arbitrage Pricing Theory 151
Capital Structure Theory 155
Summary and Conclusions 167
CHAPTER 6 Scope of Financial Engineering and Derivatives 171
Risk Hedging with Forward and Futures Contracts 173
Properties of Options Contracts 188
Option Valuation Theory 200
Applications of Option Pricing Theory in Islamic Finance 210
Risk Hedging and the Scope of Financial Engineering in Islamic Finance 216
Summary and Conclusions 220
CHAPTER 7 Financing Models and Ownership Transfer 223
Structure and Dynamics of Outstanding Balances 225
Ownership Transfer 237
Hybrid Financing Models Based on Risk Sharing 241
Summary and Conclusions 255
CHAPTER 8 Securitization and Structured Finance 257
Risk Transfer with Credit-Default Swaps 258
The Mechanics of Securitization and Structured Finance 264
Complexity of Contract Structures 268
Securitization, Structured Finance, and Completeness of Contracts 273
Securitization, Risk Transfer with Wa’ad Structures, and Options Strategies 276
Summary and Conclusions 288
CHAPTER 9 Financial Stability 291
The Financial System and the Real Economy 292
Financial Crises and Debt Financing 299
Stability of the Islamic Financial System 305
Summary and Conclusions 313
CHAPTER 10 Financial Regulation 315
The Economics of Financial Regulation 316
The Complexity of Financial Regulation 323
The Regulatory Framework under Islamic Finance 329
The Regulatory Challenges in Islamic Finance 336
Summary and Conclusions 340
Appendix A 343
Appendix B 347
References 349
Index 375
