Despite their importance in financial sector development, derivatives are still not generally accepted as legitimate products in Islamic finance. Conventional derivatives and the world of Islamic financial products has chasm between each other as they have different approaches in important issues like interest and ambiguity. While recent events in the world economy have sparked a global debate on derivatives and the damage caused by them, strict Sharia rules saved Islamic finance institutions from the worst of the crisis. On the other hand, due to lack of sufficient instruments for protection against volatility in currency, interest rate and commodity prices, the ability of Islamic finance institutions to survive future shocks is in question. As the Islamic banks are struggling to develop hedging tools with regard to doubt on their usage cased by religious differences, this article explores the validity of derivatives in accordance with basic legal principles of the Sharia and summarizes the key objections of scholars that challenge the permissibility of derivatives under Islamic law. In conclusion, the article delivers suggestions for Sharia compliance of derivatives .
Published in | International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 5) |
DOI | 10.11648/j.ijefm.20130105.14 |
Page(s) | 234-240 |
Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
Copyright |
Copyright © The Author(s), 2013. Published by Science Publishing Group |
Islamic Finance, Financial Engineering, Derivatives
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APA Style
Khalaf Al-Taani. (2013). Challenges Facing Financial Engineering with Islamic Rules. International Journal of Economics, Finance and Management Sciences, 1(5), 234-240. https://doi.org/10.11648/j.ijefm.20130105.14
ACS Style
Khalaf Al-Taani. Challenges Facing Financial Engineering with Islamic Rules. Int. J. Econ. Finance Manag. Sci. 2013, 1(5), 234-240. doi: 10.11648/j.ijefm.20130105.14
AMA Style
Khalaf Al-Taani. Challenges Facing Financial Engineering with Islamic Rules. Int J Econ Finance Manag Sci. 2013;1(5):234-240. doi: 10.11648/j.ijefm.20130105.14
@article{10.11648/j.ijefm.20130105.14, author = {Khalaf Al-Taani}, title = {Challenges Facing Financial Engineering with Islamic Rules}, journal = {International Journal of Economics, Finance and Management Sciences}, volume = {1}, number = {5}, pages = {234-240}, doi = {10.11648/j.ijefm.20130105.14}, url = {https://doi.org/10.11648/j.ijefm.20130105.14}, eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130105.14}, abstract = {Despite their importance in financial sector development, derivatives are still not generally accepted as legitimate products in Islamic finance. Conventional derivatives and the world of Islamic financial products has chasm between each other as they have different approaches in important issues like interest and ambiguity. While recent events in the world economy have sparked a global debate on derivatives and the damage caused by them, strict Sharia rules saved Islamic finance institutions from the worst of the crisis. On the other hand, due to lack of sufficient instruments for protection against volatility in currency, interest rate and commodity prices, the ability of Islamic finance institutions to survive future shocks is in question. As the Islamic banks are struggling to develop hedging tools with regard to doubt on their usage cased by religious differences, this article explores the validity of derivatives in accordance with basic legal principles of the Sharia and summarizes the key objections of scholars that challenge the permissibility of derivatives under Islamic law. In conclusion, the article delivers suggestions for Sharia compliance of derivatives .}, year = {2013} }
TY - JOUR T1 - Challenges Facing Financial Engineering with Islamic Rules AU - Khalaf Al-Taani Y1 - 2013/09/20 PY - 2013 N1 - https://doi.org/10.11648/j.ijefm.20130105.14 DO - 10.11648/j.ijefm.20130105.14 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 234 EP - 240 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20130105.14 AB - Despite their importance in financial sector development, derivatives are still not generally accepted as legitimate products in Islamic finance. Conventional derivatives and the world of Islamic financial products has chasm between each other as they have different approaches in important issues like interest and ambiguity. While recent events in the world economy have sparked a global debate on derivatives and the damage caused by them, strict Sharia rules saved Islamic finance institutions from the worst of the crisis. On the other hand, due to lack of sufficient instruments for protection against volatility in currency, interest rate and commodity prices, the ability of Islamic finance institutions to survive future shocks is in question. As the Islamic banks are struggling to develop hedging tools with regard to doubt on their usage cased by religious differences, this article explores the validity of derivatives in accordance with basic legal principles of the Sharia and summarizes the key objections of scholars that challenge the permissibility of derivatives under Islamic law. In conclusion, the article delivers suggestions for Sharia compliance of derivatives . VL - 1 IS - 5 ER -