Islamic finance is founded on overarching principles that constitute the guidelines governing any Islamic economic or financial dealings. Innovative financial engineering today constitutes one of the most critical needs of Islamic financial institutions, as it represents the forces that will drive Islamic finance toward continuous growth and efficiency. The structuring of innovative financing and Shariah-compliant instruments plays an important role in the enhancement of Islamic financial markets and Islamic risk management practices. Combining basic Sharia-compliant financial instruments within Shariah-compliant structures to precise identified needs defines the financial engineering process in Islamic finance. Such a process is very sensitive and complex as it requires multidisciplinary considerations involving deep knowledge of finance, economy, Shariah law and commercial law. Divergence of opinions among different Sharia scholars and boards, as well as the absence or lack of effectiveness of a central regulatory body, is perceived as an obstacle to the growth of investment confidence in Islamic finance. Hence, innovation, along with greater uniformity, is the order of the day to make Islamic finance an international financial system and to attract a greater number of customers. Islamic banking principles have attracted attention from academic researchers and regulators both in developing and developed countries as a result of their distinguished micro-operating fundamentals. The prohibition of interest payments by Islamic Sharia (Islamic law) has instead made equity and profit sharing the cornerstones of its operational structure activities. This book addresses the main issues of concern within Islamic banking, namely the conceptual framework and viability of interest-free banking and the assessment of its performance and future. In a world where conventional interest-based finance is the dominant framework, Islamic banking faces many challenges that must be addressed. This book discusses the contemporary issues and challenges confronting the Islamic banking system and will be of great interest to both researchers and practitioners. It analyses the past experiences of Islamic banks worldwide and provides an objective assessment of their successes and failures.
About the Author: Mondher Bellalah specializes in financial economics, financial markets and risk management. He has published more than fifteen books and 150 articles in several finance journals. He used to be a Professor of Finance and an international finance professional and adviser to several central banks and financial institutions. He has occupied several positions at well-known banks and universities. Omar Masood is the former Director of the Centre of Islamic Banking and Finance at Royal Docks Business School, University of East London, United Kingdom. He is a leading advisor and trainer in the area of Islamic banking and finance to both financial institutions and academic institutions. He held visiting professorships in leading universities all over the world and served as an advisor to a number of governments including those of Turkey and Saudi Arabia. He has authored over a hundred peer reviewed research papers, which have been published in international journals and conferences and has also authored a number of best selling books printed by leading publishers.