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Severe Financial Crises and Fundamental Reforms: The Benefits of Risk-Sharing الأزمات المالية الخطيرة والإصلاحات الأساسية: فوائد تقاسم المخاطر

Author

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  • Hossein Askari

    (Professor of International Business and International Affairs at George Washington University)

Abstract

Over the last decade, we have established a number of ideas about Islamic finance. Most importantly, the core of Islamic finance; the concept of sharing of risk and the prohibition of such debt contracts that include the payment of interest has attracted a lot of attention.( ) Risk-sharing serves one of the most important objectives of Islam: the unity of humanity. Humanity faces a multitude of risks from shocks, over which individuals and families have little or no control, but which significantly affect their livelihood and wellbeing. Risk-sharing has many benefits.These include among others: reducing human angst, increasing human interactions, enhancing trust (an important factor in economic growth), increasing social capital (another impetus to growth), promoting social cohesion, linking the real and financial sectors of the economic system, and ameliorating financial conditions to potentially preclude financial crises. --

Suggested Citation

  • Hossein Askari, 2015. "Severe Financial Crises and Fundamental Reforms: The Benefits of Risk-Sharing الأزمات المالية الخطيرة والإصلاحات الأساسية: فوائد تقاسم المخاطر," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 28(1), pages 93-128, January.
    • Handle: RePEc:abd:kauiea:v:28:y:2015:i:1:no:4:p:93-128
    DOI: 10.4197/Islec.28-1.4
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    References listed on IDEAS

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    Cited by:

    1. Bruno Bonizzi, 2015. "Capital Market Inflation in Emerging Markets: the Cases of Brazil and South Korea," PSL Quarterly Review, Economia civile, vol. 68(273), pages 115-150.
    2. Obiyathulla Ismath Bacha, Abbas Mirakhor, Hossein Askari, 2015. "Risk Sharing in Corporate and Public Finance: The Contribution of Islamic Finance," PSL Quarterly Review, Economia civile, vol. 68(274), pages 187-213.
    3. Mervyn K. Lewis, 2015. "Models of Islamic Banking: The Role of Debt and Equity Contracts نماذج الأعمال المصرفية الإسلامية: دور عقود الدين وحقوق الملكية," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 28(1), pages 151-164, January.

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