SPECIFIC RISKS OF ISLAMIC BANKING
Abstract
Islamic fi nance based on the Shariah Law
is a relatively young but fast-developing part of the global
fi nancial system. The Shariah Law prohibits Islamic
institutions from getting involved in the speculation with
complex fi nancial instruments that paralyzed their conventional
competitors during the recent fi nancial crisis.
But at the same time Islamic banks have their own risks,
which are specifi c only for them due to existing religion
restrictions. This article is dedicated to overview and
analysis of the main specifi c risks related to Islamic fi -
nancial institutions.
is a relatively young but fast-developing part of the global
fi nancial system. The Shariah Law prohibits Islamic
institutions from getting involved in the speculation with
complex fi nancial instruments that paralyzed their conventional
competitors during the recent fi nancial crisis.
But at the same time Islamic banks have their own risks,
which are specifi c only for them due to existing religion
restrictions. This article is dedicated to overview and
analysis of the main specifi c risks related to Islamic fi -
nancial institutions.
About the Authors
Арам Абгарян
Российский университет дружбы народов (г. Москва)
Russian Federation
Russian Federation
Астемир Мготлов
Российский университет дружбы народов (г. Москва)
Russian Federation
Russian Federation
References
1. Alex Arakcheev. Legal risks in Islamic Finance transaction. Th e Journal for Applied Economy . Volume 3. 2010. P. 250.
2. Djojosugito, R., (2008). Mitigating Legal Risk in Islamic Banking Operations. Humanomics, Vol. 24, No. 2, 2008. PP. 110-121.
3. Gait A. H., and Worthington A. C., (2007). A Primer on Islamic Finance: Defi nitions, Sources, Principles and Methods. School of Accounting and Finance, University of Wollongong, WP No. 07/05. P. 43.
4. Growing pains: managing Islamic banking risks. PwC 2009. P. 28.
5. Handbook of Islamic Banking. M. Kabir Hassan. 2008. P. 462.
6. Islamic banking: answers to some frequently asked questions. Islamic Research and Training Institute, 1998. P. 71.
7. Managing fi nancial risks of sukuk structures. Ali Arsalan Tariq. 2004. P. 86.
8. State Bank of Pakistan. (2008). Risk Management Guidelines for Islamic BankingInstitutions. P. 230.
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