The Credit Crunch and Islamic Finance: Shari’Ah-Compliant Finance Against the Backdrop of the Credit Crisis

TISCO Working Paper Series on Banking, Finance and Services No. 01/2011

17 Pages Posted: 20 Jan 2011 Last revised: 7 Apr 2011

See all articles by Reinout M. Wibier

Reinout M. Wibier

Tilburg Law School; Tilburg University; European Banking Center

Omar Salah

Tilburg University; De Brauw Blackstone Westbroek

Date Written: January 18, 2011

Abstract

This article deals with the question whether principles used in Islamic finance could have mitigated the effects of the crisis of credit. The authors discuss the main causes of the credit crunch, followed by a description of the main principles of Islamic finance. Through an analysis of financial instruments that are regarded as the main causes of the crisis of credit, the authors make a comparison between the conventional financial system and the Islamic financial system. Are there lessons to be learned from Islamic Finance in this respect?

Keywords: Islamic finance, credit crunch, credit crisis, financial instruments, finance, financial system, securitization

Suggested Citation

Wibier, Reinout M. and Salah, Omar, The Credit Crunch and Islamic Finance: Shari’Ah-Compliant Finance Against the Backdrop of the Credit Crisis (January 18, 2011). TISCO Working Paper Series on Banking, Finance and Services No. 01/2011 , Available at SSRN: https://ssrn.com/abstract=1742781 or http://dx.doi.org/10.2139/ssrn.1742781

Reinout M. Wibier (Contact Author)

Tilburg Law School ( email )

Tilburg, 5000 LE
Netherlands

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

European Banking Center ( email )

PO Box 90153
Tilburg, 5000 LE
Netherlands

Omar Salah

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

De Brauw Blackstone Westbroek ( email )

Tripolis
Burgerweeshuispad 301
1076 HR Amsterdam
Netherlands

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