European Parliament Library

The Economics of Islamic Finance and Securitization, Andreas Jobst

Islamic lending transactions are governed by the precepts of the shariah, which bans interest and stipulates that income must be derived as return from entrepreneurial investment. Since Islamic finance is predicated on asset backing and specific credit participation in identified business risk, structuring shariah-compliant securitization seems straightforward. This paper explains the fundamental legal principles of Islamic finance, which includes the presentation of a valuation model that helps distil the essential economic characteristics of shariah-compliant synthetication of conventional finance. In addition to a brief review of the current state of market development, the examination of pertinent legal and economic implications of shariah compliance on the configuration of securitization transactions informs a discussion of the most salient benefits and drawbacks of Islamic securitization
Table Of Contents
Contents; I. Introduction; II. Definition of Islamic finance; A. The Main Types of Islamic Finance; B. Islamic Finance and Put-Call Parity; Figures; 1. The Pay-Off Profile under Put-Call Parity of the Three Basic Forms of Islamic Finance; C. Asset Pricing Islamic Finance; III. Islamic Securitization; 2. The Pay-Off Profile of Asset-Backed Securities under the Three Basic Forms of Islamic Finance; A. Adapting the Principles of Islamic Finance to Securitization; B. Islamic Investment Certificates (Sukuk); 3. The Concept of an Ijarah Sukik Transaction; C. Current State of Islamic Securitization
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (37 p.)
Specific Material Designation
Form Of Item

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