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Shari’ah Governance Regimes for Islamic Finance: Types and Appraisal - I regimi di governance conformi alla shari’ah nella finanza islamica: tipologia e valutazione

Author

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  • AHMED, HABIB

    () (Institute of Middle Eastern & Islamic Studies, School of Government & International Affairs, Durham University)

Abstract

Islamic financial institutions provide financial services that abide by the principles and goals of Islamic law (Shari’ah). To ensure the compliance of the operations and products with Islamic law, a Shari’ah governance mechanism must be established. To understand the scope of Shari’ah governance the stakeholders of the Islamic banking industry and Shari’ah requirements need to be identified. The type of Shari’ah governance framework for Islamic finance will depend on the legal and regulatory environment in different jurisdictions. At organizational level, the overall corporate governance framework in Islamic banks will define the role of Shari’ah governance. After identifying four Shari’ah governance regimes existing in different countries, the paper suggests an optimal Shari’ah governance framework that can reduce the Shari’ah complaint risks and ensure long-term growth of the industry. - Le istituzioni finanziarie islamiche forniscono servizi nel rispetto dei principi e degli obiettivi della legge islamica (la Shari’ah). Al fine di assicurare che le operazioni e i prodotti finanziari si conformino alla legge islamica devono essere adottati adeguati sistemi di governance. Per capire le modalità di tale governance è necessario identificare gli stakeholder del sistema bancario islamico e i requisiti necessari secondo la Shari’ah. Il tipo di struttura della governance dipenderà a livello legale e regolatorio da diverse giurisdizioni. Dopo aver individuato quattro regimi di governance che rispettano la Shari’ah applicati in diversi paesi, questo studio delinea una governance ideale in grado di ridurre i rischi e assicurare la crescita del settore nel lungo periodo.

Suggested Citation

  • Ahmed, Habib, 2011. "Shari’ah Governance Regimes for Islamic Finance: Types and Appraisal - I regimi di governance conformi alla shari’ah nella finanza islamica: tipologia e valutazione," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 64(4), pages 393-412.
  • Handle: RePEc:ris:ecoint:0628
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    References listed on IDEAS

    as
    1. Ahmed, Habib & Chapra, Mohammad Umar, 2002. "Corporate Governance in Islamic Financial Institution (Occasional Paper)," Occasional Papers 93, The Islamic Research and Teaching Institute (IRTI).
    2. Khan, Tariqullah & Ahmed, Habib, 2001. "Risk Management: An Analysis of Issues in Islamic Financial Industry (Occasional Papers)," Occasional Papers 91, The Islamic Research and Teaching Institute (IRTI).
    3. Abbas Mirakhor & Mohsin S. Khan, 1991. "Islamic Banking," IMF Working Papers 91/88, International Monetary Fund.
    4. M.N. Siddiqi, 2007. "Shariah,Economics And The Progress Of Islamic Finance: The Role Of Shariah Experts," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 15(1), pages 93-114, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Islamic Finance; Shari’ah Governance; Shari’ah Supervisory Boards;

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • P59 - Economic Systems - - Comparative Economic Systems - - - Other

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