Description
Annual turnover for Islamic banks is now estimated at $350 billion, compared with $5 billion in 1985. More than 250 financial institutions in 45 countries now practice some form of Islamic banking, and the system has developed its own infrastructure to meet Sharia standards. The authors, experts for the World Bank, describe the principles and key stakeholders of Islamic financial institutions, including the operation of financial systems, the theory and practice of Islamic financial instruments, and the desired outcomes of corporate governance. They provide a framework for risk analysis and describe the structure of the balance sheet and income statement, then analyze credit risk management, asset-liability management, liquidity, market risks, operational risks, and risks associated most closely with Islamic banking. They describe governance and regulation of Islamic banks, including the relationship between risk analysis and bank supervision, and list issues likely to arise soon. Annotation ©2008 Book News, Inc., Portland, OR (booknews.com)
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Islamic finance is emerging as a rapidly growing part of the financial sector in the Islamic world and is not restricted to Islamic countries, but is spreading wherever there is a sizable Muslim community. According to some estimates, more than 250 financial institutions in over 45 countries practice some form of Islamic finance, and the industry has been growing at a rate of more than 15 percent annually for the past several years. The market's current annual turnover is estimated to be $70 billion, compared with a mere $5 billion in 1985, and is projected to hit the $100 billion mark by the turn of the century. Since the emergence of Islamic banks in the early 1970s, considerable research has been conducted, mainly focusing on the viability, design and operations of a 'deposit-accepting' financial institution, which operates primarily on the basis of profit and loss partnerships rather than interest. This publication provides a comprehensive overview of topics related to the assessment, analysis, and management of various types of risks in the field of Islamic banking. It is an attempt to provide a high-level framework (aimed at non-specialist executives) attuned to the current realities of changing economies and Islamic financial markets. This approach emphasizes the accountability of key players in the corporate governance process in relation to the management of different dimensions of Islamic financial risk.
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