Islamic Finance: An Alternative in the Global Financial Market?

Abstract:     
Islamic finance has been one of the fastest growing segments in the financial services industry. Fueled by increasing income streams in oil rich countries, a rise in Islamic faithfulness, and a growing middle class in Muslim countries, this segment of the financial services market is expected to continue to grow at record breaking levels. Based on sharia, or Islamic law, Islamic finance prohibits certain types of investments and the paying of interest. With the requirement that risk be shared among parties to a financial transaction, some have proposed that Islamic finance is a safer alternative than traditional Western finance and protects markets from economic failure.

Number of Pages in PDF File: 3

Keywords: Islamic finance, sharia, financial crisis, Muslim finance, Muslim banking

JEL Classification: M10

working papers series