THE WAY FORWARD FOR INNOVATION IN ISLAMIC FINANCIAL PRODUCTS AND INSTRUMENTS (ISRA-TR REPORT 2016)

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Year: 2016


To put it very simply, the way forward is about a back to basics approach. Islamic finance is about Risk Sharing in the context of the Real Economy. The global financial crisis and much post-crisis research have clearly demonstrated that there currently exists a nexus of: Low interest rates, increase in money supply, increase in credit, increase in debt and increase in leverage created the liquidity that hunted down yield which eventually found its way to subprime mortgages and commodity market speculation. There is an urgent need, therefore, for financial intermediaries to serve the Real Economy rather than the Financial Economy. In that context the following are my observations and suggestions for innovation as the way forward for Islamic finance, in four specific areas: regulation and supervision of IFIs, human capital development, product structuring, and global connectivity. 

 

Source:

ISRA THOMSON REUTERS ISLAMIC COMMERCIAL LAW REPORT 2016 (Pg 125 - 127)


 

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