IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/20489.html
   My bibliography  Save this paper

Sukukization: Islamic Economic Risk Factors in Shari’ah View

Author

Listed:
  • Alsayyed, Nidal

Abstract

Despite the Economic closeness of overall concept, Sukukization (Islamic Securitization) is not equal to “Securitization” as it is known in its conventional sense. Securitization, generally relates to the converting of loans of various sorts into marketable securities by packaging the loans into pools and then selling shares of ownership in the pool itself. Sukukization, on the hand; refers to, Islamic Sukuk Investment (as defined by AAOIFI) are certificates of equal value representing undivided shares in ownership of tangible assets, usufruct and services. The development of innovative Economic financial solutions in the Muslim world has been dormant for centuries. It is only recently, since the early 1970s that significant work that has been done in the field of Islamic Capital Market. In order to take benefit from Western financial structures, care must be taken to make sure that the concepts are acceptable by Shari’ah. The West has had significant success in linking the End-Investor (Excess Capital) with the most optimal user of this Excess Capital; be it the Stock Market, Debt Market or the Securitization structures, they all serve the purpose of linking Capital with its most optimal (on a risk-adjusted basis) user. It must be kept in mind, that even though the West has had more success than the Muslim world in implementation of a financial system, it has been plagued with constant cycles of boom and bust. The most recent financial markets crisis has again opened the discussion for the need of structural changes to the current financial models/instruments in place. Most commentators have stressed for the need of more regulation whereas the stress should be on making changes to the structural features of the financial instruments. An in-depth discussion of the financial system is beyond the scope of this article and for now the focus will only be on the Islamic Securitization structures (Sukukization) for the housing capital market and the relevant Economic factors.

Suggested Citation

  • Alsayyed, Nidal, 2010. "Sukukization: Islamic Economic Risk Factors in Shari’ah View," MPRA Paper 20489, University Library of Munich, Germany, revised 15 Feb 2010.
  • Handle: RePEc:pra:mprapa:20489
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/20489/1/MPRA_paper_20489.pdf
    File Function: original version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/20662/1/MPRA_paper_20662.pdf
    File Function: revised version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/20675/1/MPRA_paper_20675.pdf
    File Function: revised version
    Download Restriction: no

    References listed on IDEAS

    as
    1. El-Hawary & Dahlia & Grais, Wafik & Iqbal, Zamir, 2004. "Regulating islamic financial institutions : The nature of the regulated," Policy Research Working Paper Series 3227, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saba, Irum & Alsayyed, Nidal, 2010. "Alternative Pricing Mechanisms for Islamic Financial Instruments: Economic Perspective," MPRA Paper 20683, University Library of Munich, Germany.
    2. Saba, Irum & Alsayyed, Nidal, 2010. "Economic Pricing Mechanisms for Islamic Financial Instruments: Ijarah Model," MPRA Paper 20685, University Library of Munich, Germany.

    More about this item

    Keywords

    Islamic Economics; Sukukization; Macroeconomics; Shari’ah Standards; AAOIFI; Islamic Economics; Securitization; SPV;

    JEL classification:

    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • A10 - General Economics and Teaching - - General Economics - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:20489. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.