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The development of Islamic finance in the GCC

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  • Wilson, Rodney

Abstract

Modern Islamic banking originated with the establishment of the Dubai Islamic Bank in 1975. The study evaluates the development of Islamic banking in the GCC since then, an industry which now encompasses Islamic takaful (insurance) and shariah-compliant asset management, as well as retail and investment banking. An examination is made of the extent to which government policy, through both legislation and regulation, has facilitated the development of Islamic finance. Shariah governance systems are appraised, in particular the workings of the devolved form of self-governance by Islamic financial institutions. The deposit facilities offered by Islamic banks in the GCC are discussed, as well as the financing provided, notably trade finance, consumer credit and mortgages for real estate, which are the dominant types of funding by Islamic banks. The issuance and trading of Islamic sukuk securities is also considered, as well as the role of the region’s financial centres.

Suggested Citation

  • Wilson, Rodney, 2009. "The development of Islamic finance in the GCC," LSE Research Online Documents on Economics 55281, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:55281
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    File URL: http://eprints.lse.ac.uk/55281/
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    References listed on IDEAS

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    1. M. Kabir Hassan & Mervyn K. Lewis (ed.), 2007. "Handbook of Islamic Banking," Books, Edward Elgar Publishing, number 3621, December.
    2. Mervyn K. Lewis & Latifa M. Algaoud, 2001. "Islamic Banking," Books, Edward Elgar Publishing, number 1488, December.
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    Cited by:

    1. Abdul Aziz, Ahmad Faizal, 2012. "Shariah Governance: Challenges Ahead," MPRA Paper 47772, University Library of Munich, Germany.
    2. Reiche, Danyel, 2010. "Sovereign wealth funds as a new instrument of climate protection policy? A case study of Norway as a pioneer of ethical guidelines for investment policy," Energy, Elsevier, vol. 35(9), pages 3569-3577.
    3. Tanin, Tauhidul Islam & Hasanov, Akram Shavkatovich & Shaiban, Mohammed Sharaf Mohsen & Brooks, Robert, 2022. "Risk transmission from the oil market to Islamic and conventional banks in oil-exporting and oil-importing countries," Energy Economics, Elsevier, vol. 115(C).
    4. Ashraf Mishrif & Erhan Akkas, 2018. "Exploring Connexion between Sovereign Wealth Funds and Islamic Finance in the Gulf Countries," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(5), pages 75-86, May.
    5. Abu-Alkheil, Ahmad & Khan, Walayet A. & Parikh, Bhavik & Mohanty, Sunil K., 2017. "Dynamic co-integration and portfolio diversification of Islamic and conventional indices: Global evidence," The Quarterly Review of Economics and Finance, Elsevier, vol. 66(C), pages 212-224.
    6. Zakaria Ali Aribi & Thankom Arun, 2015. "Corporate Social Responsibility and Islamic Financial Institutions (IFIs): Management Perceptions from IFIs in Bahrain," Journal of Business Ethics, Springer, vol. 129(4), pages 785-794, July.
    7. Godlewski, Christophe J. & Turk-Ariss, Rima & Weill, Laurent, 2016. "Do the type of sukuk and choice of shari’a scholar matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 132(S), pages 63-76.
    8. repec:ipg:wpaper:2014-401 is not listed on IDEAS
    9. Ataur Belal & Omneya Abdelsalam & Sardar Nizamee, 2015. "Ethical Reporting in Islami Bank Bangladesh Limited (1983–2010)," Journal of Business Ethics, Springer, vol. 129(4), pages 769-784, July.
    10. Godlewski, Christophe J. & Turk-Ariss, Rima & Weill, Laurent, 2016. "Do the type of sukuk and choice of shari’a scholar matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 132(S), pages 63-76.
    11. Zulkhibri Abdul Majid , Muhamed & Ghazal , Reza, 2012. "Comparative Analysis of Islamic Banking Supervision and Regulation Development," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 6(3), pages 113-162, April.
    12. Barakat, Sultan & Zyck, Steven A., 2010. "Gulf state assistance to conflict-affected environments," LSE Research Online Documents on Economics 55240, London School of Economics and Political Science, LSE Library.
    13. Gani Azmat & Al-Muharrami Saeed, 2016. "The Effect of Institutional Quality on Bank Lending in the Gulf Cooperation Council Countries," Review of Middle East Economics and Finance, De Gruyter, vol. 12(1), pages 55-63, April.
    14. Hossain, Akhand Akhtar, 2014. "Empirical relationships among money, output and consumer prices in nine Muslim-majority countries," Journal of Asian Economics, Elsevier, vol. 31, pages 42-56.
    15. repec:zbw:bofitp:2014_021 is not listed on IDEAS
    16. Pepinsky, Thomas B., 2013. "Development, Social Change, and Islamic Finance in Contemporary Indonesia," World Development, Elsevier, vol. 41(C), pages 157-167.
    17. Christophe J. GODLEWSKI & Rima Turk-Ariss & Laurent Weill, 2014. "What Influences Stock Market Reaction to Sukuk Issues? The Impact of Scholars and Sukuk Types," Working Papers of LaRGE Research Center 2014-03, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.

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    More about this item

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance

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