Islamic lending transactions are governed by the precepts of the shariah, which bans interest and stipulates that income must be derived as return from entrepreneurial investment. Since Islamic finance is predicated on asset backing and specific credit participation in identified business risk,...

Internet resources, extended media coverage and international organizations’ reports recently witness the increasing interest of western banks in new models of finance, particularly Islamic finance and microfinance. This new trend is not only channeled through the frame of corporate social...

The relative financial strength of Islamic banks is assessed empirically based on evidence covering individual Islamic and commercial banks in 18 banking systems with a substantial presence of Islamic banking. We find that (i) small Islamic banks tend to be financially stronger than small...

This paper assesses the impact of bonds issued according to Islamic principles (Sukuk), on the cost and risk structure of investment portfolios by using the Value-at-Risk (VaR) framework. The market for Sukuk has grown tremendously in recent years at about 45 percent a year. Sukuk provide...

The financial crisis has fueled interest in alternatives to traditional asset classes that might be less affected by large market gyrations and, thus, provide for a less volatile development of a portfolio. One attempt at selecting stocks that are less prone to extreme risks, is obeyance of...

In Against the gods: the remarkable story of risk (1996), Peter L. Bernstein illustrates how the mastery of risk has driven modern Western society into converting 'the future from an enemy into an opportunity'. Far from being an antagonist, as the unpredictable whim of gods or mysterious fate,...

The financial crisis has fueled interest in alternatives to traditional asset classes that might be less a ected by large market gyrations and, thus, provide for a less volatile development of a portfolio. One attempt at selecting stocks that are less prone to extreme risks, is obeyance of...

“Participation Banks” are the final review process of the banking sector that have become indispensable for the economy of countries worldwide. Although participation banks do not have a long history, they were included in the Bank Law of 2005, and these banks are getting more attention each...

Islamic finance is one of the most rapidly growing sectors in recent years. During the last decade the global value of Islamic assets has grown at yearly the pace of 10-12 per cent. Sharia compliant products, which are not based on the interest rate, has become popular also in non-Muslim...

The Islamic finance industry has grown substantially in Asia over the last 2 decades. The Muslim populations in different Asian countries, especially in Southeast Asia, are increasing. Rapid Muslim population growth and improving living standards may enhance the popularity of Islamic finance as...