Maqasid Foundations of Market Economics

Maqasid Foundations of Market Economics

Maqasid Foundations of Market Economics

Maqasid Foundations of Market Economics

Synopsis

Explains the exchange economics behind the Shari'ah compliance conditions of Islamic finance. Drawing on received sources of 'maqasid' (Shari'ah's practical objectives), this book demonstrates how the principles of market economics affect how markets and financial instititions actually operate under Shari'ah law. It shows where Islamic economics converges with and differs from conventional economics through the banning of usury and other Shari'ah-prohibited trade practices.Islamic finance rests on the principles of free market exchange of Islamic economics. But the latter has failed to keep pace with the rapid developments of the former. Much work published about Islamic economics is at least idealistic if not radically ideological, with little relevance to the Islamic financial industry. This book provides the coherent body of economic theory that students and practitioners of Islamic finance need in order to understand how the maqasid gives a sense of direction to developments in the industry.

Excerpt

This book provides a groundwork of market economics for markets and institutions that operate in accordance with Islamic Law (that is, Shari‘ah). Major in this field are the interest-free Islamic financial institutions that sparked a remarkable shift from conventional financing in less than four decades–thanks to well-defined standards of Shari‘ah compliance developed concertedly by Shari‘ah scholars, bankers and professional practitioners. At the industrial level, clear regulatory standards have been developed, notably through the Islamic Financial Services Board (IFSB), while the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has developed accounting and auditing standards. These efforts have helped to incorporate the Islamic financial industry within the global financial system. the engagement of major international banks and investment corporations in the structuring of interest-free solutions has further enhanced the potential capability of Islamic finance to command worldwide attention. the concept of Shari‘ah compliance has thus attained a technically sophisticated character through careful synthesis of Islamic jurisprudential formality, modern financial engineering and civil legal conformity. in response to increasing pressure to secure competitive positions in the market for Islamic financial qualifications, degree awarding bodies, both academic and professional, have timely captured the opportunity to develop courses on Islamic banking and finance within their academic and professional . . .

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