Thirty Years of Islamic Banking: History, Performance and Prospects (Palgrave Macmillan Studies in Banking and Financial Institutions)

This text explains how Islamic banking works and what it offers as an alternative model of financial intermediation. Important questions addressed include: Why Islamic banking started and where it is going; who the main players are at present and whom it will attract in future; what its strengths and weaknesses are; whether Islamic banks will survive in highly competitive and globalized financial markets; what their prospects and potentials are; and how the relative performance and efficiency of Islamic banks compares to conventional banks? Cover......Page 1 Contents......Page 6 List of Tables and Boxes......Page 8 Preface......Page 10 B......Page 12 I......Page 13 M......Page 14 S......Page 15 Z......Page 16 List of Abbreviations......Page 17 About the Authors......Page 19 1 Introduction......Page 20 Why Islamic banking: the rationale......Page 23 Principles of Islamic finance: the basis......Page 25 Conclusion......Page 35 What is Islamic banking: the model......Page 37 How Islamic banking works in practice......Page 45 How is Islamic banking different from conventional banking: the salient features......Page 47 What does the Islamic banking model promise?......Page 50 Conclusion......Page 53 How Islamic banking started......Page 55 Various manifestations of the Islamic financial industry......Page 57 Country experiences with Islamic banking......Page 58 Islamic banks and financial institutions working in mixed environments......Page 65 Islamic banking practices by conventional banks......Page 77 International Islamic financial institutions......Page 78 Other institutions......Page 82 Conclusion......Page 84 Soundness......Page 91 Prudence......Page 93 Economy......Page 95 Profitability......Page 97 Islamic and conventional banks: a comparative analysis......Page 100 Conclusion......Page 104 Why study Islamic bank efficiency?......Page 107 Measuring bank efficiency......Page 108 Empirical evidence on efficiency in Islamic banking......Page 116 Conclusion......Page 123 Theoretical challenges: unresolved issues......Page 124 Practical challenges: operational problems......Page 130 Conclusion......Page 140 Where Islamic banking needs to go: the way ahead......Page 142 Areas of potential growth......Page 152 Conclusion......Page 159 9 Some Areas for Further Research in Islamic Banking and Finance......Page 160 Asymmetric information......Page 161 Moral hazard problems......Page 162 Principal agent problems and the need for monitoring......Page 164 Implications of the sharing features of PLS contracts......Page 166 The need for further empirical investigations......Page 168 Conclusion......Page 169 10 Summary and Conclusions......Page 171 Notes......Page 176 Bibliography......Page 179 A......Page 185 B......Page 186 C......Page 188 D......Page 190 E......Page 191 F......Page 192 H......Page 194 I......Page 195 K......Page 200 L......Page 201 M......Page 202 P......Page 203 Q......Page 204 R......Page 205 S......Page 206 U......Page 208 Z......Page 209 During the last thirty years Islamic banking has emerged as another viable way of financial intermediation. It has gained credibility and respect in international financial circles. The practice of Islamic banking has spread to all corners of the globe. It is one of the fastest growing industries posting double digit annual growth rates for almost thirty years. The size of the industry has reached hundreds of billions of dollars. While it is the preferred way of banking for one fifth of humanity, it offers a wider choice of financial products to all. This text explains how this fascinating model of financial intermediation works, what it offers and how Islamic bank performance compares to that of conventional banks. Will Islamic banks survive in highly competitive and globalized financial markets? What are their prospects and potentials? The text aims to provide objective answers to these and similar questions. It is an essential read for anyone who wants to know about the features, participants and practices of Islamic banking and finance This Text Explains How This Model Of Financial Intermediation Works, What It Offers And How Islamic Bank Performance Compares With That Of Conventional Banks. Will Islamic Banks Survive In Highly Competitive And Globalized Financial Markets? What Are Their Prospects And Potentials? The Text Aims To Provide Objective Answers To These And Similar Questions. It Is Essential Reading For Anyone Who Wants To Know About The Features, Participants And Practices Of Islamic Banking And Finance.--jacket. 1. Introduction -- 2. Theoretical Foundations Of Islamic Banking -- 3. Development Of The Islamic Banking Model -- 4. History And Growth Of Islamic Banking And Finance -- 5. Performance Of Islamic Banks -- 6. Efficiency In Islamic Banking -- 7. Challenges Facing Islamic Banking -- 8. Islamic Banking In The Twenty-first Century -- 9. Some Areas For Further Research In Islamic Banking And Finance. Munawar Iqbal And Philip Molyneux. Includes Bibliographical References (p. 160-165) And Index. This text explains how Islamic banking works and what it offers as an alternative model of financial intermediation. Important questions addressed include: Why Islamic banking started and where it is going? Who are the main players at present and whom it will attract in future? What are its strengths and weaknesses? Will Islamic banks survive in highly competitive and globalized financial markets? What are their prospects and potentials? How does the relative performance and efficiency of Islamic banks compare to conventional banks?