Islamic Finance and Economic Development

A comprehensive guide to mitigating risk and fostering growth in the Islamic financial sector Islamic finance, like conventional finance is a business of financial intermediation. Its distinctive features relate to the requirement that it abides by Shari'a rules that promote fairness of contracts and prevention of exploitation, sharing of risks and rewards, prohibition of interests, and tangible economic purpose. Islamic finance should not fund activities considered haram or sinful. In Islamic Finance and Economic Development: Risk, Regulation, and Corporate Governance, authors Amr Mohamed El Tiby and Wafik M. Grais expound how these distinctive features bear on the opportunities and challenges facing the Islamic finance industry s development, risk management, regulation and corporate governance. An experienced banker with various Middle East banking institutions, notably as former Vice President at UAE Union National Bank and Mashreq bank, Dr. El Tiby offers an informed perspective on corporate finance from within the Islamic finance industry. With a long experience in international development and finance, notably as former Director at the World Bank and Founder and Chairman of a Cairo-based Financial Advisors company, Dr. Grais brings global financial experience on the topics of financial systems assessments, corporate governance, Islamic finance, and public policy. Covers the history and basics of Islamic finance, and provides insight into current conditions and future landscape Explores regulatory framework, including opportunities and challenges for the industry s development and mainstreaming Presents an approach to developing a systemic Shari'a governance framework to govern operations in the Islamic finance industry

A comprehensive guide to mitigating risk and fostering growthin the Islamic financial sectorIslamic finance, like conventional finance is a business offinancial intermediation. Its distinctive features relate tothe requirement that it abides by Shari'a rules that promotefairness of contracts and prevention of exploitation, sharing ofrisks and rewards, prohibition of interests, and tangible economicpurpose. Islamic finance should not fund activities considered"haram" or sinful. In Islamic Finance and EconomicDevelopment: Risk, Regulation, and Corporate Governanceauthors Amr Mohamed El Tiby and Wafik M. Grais expound how thesedistinctive features bear on the opportunities and challengesfacing the Islamic finance industry'sdevelopment, risk management, regulation and corporategovernance.An experienced banker with various Middle East bankinginstitutions, notably as former Vice President at UAE UnionNational Bank and Mashreq bank, Dr. El Tiby offers aninformed perspective on corporate finance from within theIslamic finance industry. With a long experience in internationaldevelopment and finance, notably as former Director at the WorldBank and Founder and Chairman of a Cairo-based FinancialAdvisors company, Dr. Grais brings global financial experience onthe topics of financial systems assessments, corporate governanceIslamic finance, and public policy.* Covers the history and basics of Islamic finance, and providesinsight into current conditions and future landscape* Explores regulatory framework, including opportunities andchallenges for the industry's development andmainstreaming* Presents an approach to developing a systemic Shari'agovernance framework to govern operations in the Islamic financeindustry

Preface ixAcknowledgments xvAcronyms xviiAbout the Authors xxiPART ONE Emergence of Modern Islamic Finance 1CHAPTER 1 History and Core Principles of Islamic Finance 3CHAPTER 2 Islamic Finance: Opportunity for Egypt'sDevelopment 19PART TWO Managing Systemic Risks 51CHAPTER 3 Risks, Spillovers, and Distress 55CHAPTER 4 Coping with Crises: Policies, Institutions, andMarkets 67PART THREE Regulatory Challenges 93CHAPTER 5 The Dilemma of Tailor-Made versus MainstreamRegulation 95CHAPTER 6 Toward an Enabling Framework 107PART FOUR Corporate Governance 121CHAPTER 7 Financial Fiduciary Governance 123CHAPTER 8 Corporate Governance and Shari'a Compliance145CHAPTER 9 Toward a Systemic Shari'a Governance Framework181APPENDIX Islamic Finance: The International Landscape 205References 217Index 231