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The Challenge of Islamic Finance

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  • Sheng, Andrew
  • Singh, Ajit

Abstract

From its humble beginnings in the 1990s, Islamic finance has become a trillion US dollar industry. The market consensus is that Islamic finance has a bright future due to favourable demographics and rising incomes in the Muslim community. Moreover, despite voices sceptical of an accommodation between Islamic and global finance, leading global banks are buying Islamic bonds and forming subsidiaries specially to conduct Islamic finance business. Special laws have been passed in non-Muslim financial centres, - London, Singapore and Hong Kong - to facilitate the operation of Islamic banks and associated financial institutions.

Suggested Citation

  • Sheng, Andrew & Singh, Ajit, 2012. "The Challenge of Islamic Finance," MPRA Paper 53044, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:53044
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    File URL: https://mpra.ub.uni-muenchen.de/53044/1/MPRA_paper_53044.pdf
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    References listed on IDEAS

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    1. Simon Deakin & Ajit Singh, 2009. "The Stock Market, the Market for Corporate Control and the Theory of the Firm: Legal and Economic Perspectives and Implications for Public Policy," Chapters,in: The Modern Firm, Corporate Governance and Investment, chapter 9 Edward Elgar Publishing.
    2. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    3. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    4. Sheng,Andrew, 2009. "From Asian to Global Financial Crisis," Cambridge Books, Cambridge University Press, number 9780521134156, April.
    5. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    6. Timur Kuran, 2011. "The Long Divergence: How Islamic Law Held Back the Middle East," Economics Books, Princeton University Press, edition 1, number 9273.
    7. Mirakhor, Abbas & Krichene, Noureddine, 2009. "The Recent Crisis: Lessons for Islamic Finance," MPRA Paper 56022, University Library of Munich, Germany.
    8. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    9. Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    10. Jonathan Eaton & Mark Gersovitz & Joseph E. Stiglitz, 1991. "The Pure Theory of Country Risk," NBER Chapters,in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 391-435 National Bureau of Economic Research, Inc.
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    12. Fry, Maxwell J, 1997. "In Favour of Financial Liberalisation," Economic Journal, Royal Economic Society, vol. 107(442), pages 754-770, May.
    13. Sheng,Andrew, 2009. "From Asian to Global Financial Crisis," Cambridge Books, Cambridge University Press, number 9780521118644, April.
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    Cited by:

    1. Sheng, Andrew & Singh, Ajit, 2013. "Islamic Stock Markets in a Global Context," MPRA Paper 53035, University Library of Munich, Germany.
    2. Andrew Sheng & Ajit Singh, 2012. "Enhancing Islamic Finance: Establishing an Islamic Stock Market that Overcomes Problems of the Existing Stock Market," Working Papers wp437, Centre for Business Research, University of Cambridge.

    More about this item

    Keywords

    Islamic Finance; Islamic bonds; global banks; financial institutions;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F30 - International Economics - - International Finance - - - General
    • G2 - Financial Economics - - Financial Institutions and Services

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