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Islamic Finance Reform: A Few Points to Ponder إصلاح التمويل الإسلامي: نقاط للتأمل

Author

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  • Volker Nienhaus

    (Honorary Professor, University of Bochum, Germany Consultant, Islamic Financial Services Board (IFSB))

Abstract

Islamic finance has proved its commercial viability, but many industry players and outside observers see a need for reform. Points to ponder include: (i) an accounting standard for tawarruq (which will be issued soon) will trigger a new debate on substance over form, (ii) the failure to re-brand Islamic finance as ethical finance in the West, (iii) the possibility that regulatory standards with discretionary latitude for regulators will create more diversity instead of uniformity in the industry, (iv) the neglect of finance for manufacturing and the concentration on consumer finance and real estate in major Islamic finance jurisdictions, (v) a possible enhancement of the profitability of Islamic banks for their equity holders in some jurisdictions due to a favorable formula for the calculation of the regulatory minimum capital, (vi) unreasonably high expectations for risk-sharing or PLS financing by Islamic banks and (vii) the lack of a suitable non-bank financial institution or collective investment scheme that could be conceptualized as a crowd funding scheme like the Malaysian Investment Account Platform with some modifications. أثبت التمويل الإسلامي جدواه الاقتصادية. ولكن في المقابل، يرى العديد من الناشطين في الصناعة والمراقبين الخارجيين ضرورة إصلاحه. ومن النقاط التي يجب تأملها عند التفكير في إصلاح التمويل الإسلامي ما يلي: (1) سيثير المعيار المحاسبي للتورق (التي ستصدر قريبا) نقاشا جديدا حول المفاضلة بين الشكل والمضمون، (2) الإخفاق في تصنيف التمويل الإسلامي على أنه تمويل أخلاقي في الغرب، (3) احتمال أن تبني معايير تنظيمية من قبل السلطات التشريعية ينتج عنها مزيدًا من الاختلاف في معايير الصناعة بدلاً من توحيدها، (4) استمرار إهمال تمويل الصناعات والتركيز على تمويل المستهلك وشراء المساكن في معظم الدول المتبنية للتمويل الإسلامي، (5) احتمال تعظيم أرباح مالكي البنوك الإسلامية بسبب استخدام صيغة مواتية عند حساب الحد الأدنى من رأس المال التنظيمي (6) وجود توقعات عالية وغير منطقية تطالب المصارف الإسلامية بتبني صيغ المشاركة في ظل (7) الافتقار إلى مؤسسة مالية غير مصرفية تقوم بهذا الدور من خلال منصات تمويل اجتماعي مثل منصة الحساب الاستثماري الماليزي.

Suggested Citation

  • Volker Nienhaus, 2020. "Islamic Finance Reform: A Few Points to Ponder إصلاح التمويل الإسلامي: نقاط للتأمل," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 33(2), pages 109-121, July.
    • Handle: RePEc:abd:kauiea:v:33:y:2020:i:2:no:8:p:109-121
    DOI: 10.4197/Islec.33-2.8
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    References listed on IDEAS

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    1. Rusni Hassan, 2020. "Reforming Islamic Finance: Why and How? إصلاح التمويل الإسلامي: لماذا و كيف؟," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 33(2), pages 67-80, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Islamic finance; Ethical finance; Regulation; Crowd funding. التمويل الإسلامي، التمويل الأخلاقي، التنظيم، التمويل الجماعي.;
    All these keywords.

    JEL classification:

    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
    • P49 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Other
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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