Risk Sharing in Finance – the Islamic Finance Alternative (Wiley Finance) - Hardcover

Reseña del editor

How the Islamic finance approach to risk can serve as a model for global reform The recent U.S. financial debacle has affected the entire world and led to major reviews of risk management in financial institutions. Perhaps a simpler alternative is just to adopt the systems used for centuries in Islamic finance. Risk Sharing in Finance expounds upon this novel idea, suggesting that the Islamic financial system can be developed for use around the world by providing a helpful paradigm for crafting global financial reforms. Demonstrating how Islamic finance can successfully expand its array of risk sharing instruments, for example issuing government shares to finance development projects and placing limits on short sales and leveraging, the book makes a compelling case for thinking outside the box to redevelop a vibrant stock market. * Provides analysis of the comparative historical, theoretical, and empirical investigation of risk management in both the conventional and the Islamic-type financial systems * Explores the benefits and the implications of introducing Islamic finance around the world and explains how wider reliance on risk sharing can be implemented * Establishes a connection between the flawed contemporary Western system of capitalist finance and the ancient, traditional forms of risk-sharing prevalent in Islamic finance Offering a timely look at financial reform, Risk Sharing in Finance draws on the expertise of author Zamir Iqbal of the World Bank, along with a host of co-authors Abbas Mirakhor, Hossein Askari, and Noureddine Krichene to present a new form of financial reform.

Contraportada

The arrival of Risk Sharing in Finance: The Islamic Finance Alternative with its alternative perspective on a financial system design to mitigate future financial crises could not have been better timed. We are still suffering from the perplexing 2008-2009 financial crisis of banking and credit risk, which has had a devastating impact on the United States, United Kingdom and Europe. In contrast to many proposed solutions, which have never been tested, this one draws on the considerable experience from the Islamic financial risk-sharing system. Whether prime researcher, experienced public policy maker or seasoned private-sector practitioner, the reader will find this a thought-provoking approach to address fundamental financial reform.

Robert C. Merton
Nobel Laureate in Economics, 1997
The School of Management Distinguished Professor of Finance at the MIT Sloan School of Management and University Professor Emeritus at Harvard University

Risk Sharing in Finance: The Islamic Finance Alternative portrays how finance should ideally be done in the Islamic world. An array of different forms of equity contract substitutes for debt. The authors give a new perspective on fundamental reform of our financial system, as they also give us a vision of a future, in which financial crises are very much muted, or, like smallpox, have become a scourge of the past.

George Akerlof
Nobel Laureate in Economics, 2001
Koshland Professor of Economics, University of California at Berkeley

The recent financial crisis has highlighted the risks of excessive debt and leverage. Could a fully equity-based financial system offer a superior alternative? This thoughtful and provocative book argues that it would. Essential reading for those who want to understand how a completely Islamized financial system might work in practice.

Sir Andrew Crockett
Vice Chairman of JPMorgan Chase International; Member, The Group of Thirty; and Former Head of the Bank for International Settlement (BIS)

This is a beautifully written, crystal clear, and tremendously insightful book about what ails our financial system and how key features of Islamic finance could help. Every student of finance can and should learn from this financial gem.

Laurence J. Kotlikoff
Author, Jimmy Stewart Is Dead
William Warren Fairfield Professor of Economics, Boston University