Religion and modern finance: islamic banking and the use of derivatives

• Autor(a) principal: Lisboa, Ricardo
• Data de Publicação: 2016
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/13505
• topic: Shariah; Islamic finance; Derivatives; Banking; Sistema bancário; Lei islâmica; Especulação monetária; Religião; Gestão internacional

Throughout modern history, the world has faced economic crisis ranging from the great depression in the 1930s in the United States of America to the Dot-com bubble collapse in 2001 and more recently the subprime crisis for which the aftershocks are still felt in several countries. Amidst these cyclical events, Islamic banking has been gaining traction and increased importance in countries where Islamic religion is predominant: in Gulf cooperation council countries, in Asian countries and African countries. The defining characteristics of Islamic Banking (which follows Shariah law) seem to counterbalance the pitfalls that lead to the above mentioned crisis, though it is not clear if the road ahead of this industry, and the necessary developments it needs to achieve in order to continue its growth, are feasible and complementary to the core of Shariah law. The development of tools for managing risk specially, become increasingly important as the size of the Islamic banking industry increase. In order to prevent a similar path as conventional banking, a kind of symbiosis between the tenets of Shariah and the use of derivative instruments needs to be reached. It is the analysis of this relationship that is the goal of this thesis. This will be done by reviewing the current situation of Islamic Banking, analyzing a sample of the available products in both systems and analyzing the possibility of implementation and standardization of derivatives in Shariah through the current process of approval of such instruments.