Islamic structured investment: an example and critical analysis
This paper discusses in detail one example of an Islamic structured investment product. The said product is used as an illustration to highlight some issues deemed critical in the development of the wider Islamic finance space. The author humbly submits that convoluted structures, quite common in...
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| Main Author: | |
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| Format: | Conference or Workshop Item |
| Language: | English English |
| Published: |
International Islamic University Malaysia
2019
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/73487/9/73487%20Islamic%20Structured%20Investment%20-Abstract.pdf http://irep.iium.edu.my/73487/10/73487%20Islamic%20Structured%20Investment.pdf http://irep.iium.edu.my/73487/ |
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| Summary: | This paper discusses in detail one example of an Islamic structured investment product. The said
product is used as an illustration to highlight some issues deemed critical in the development of the
wider Islamic finance space. The author humbly submits that convoluted structures, quite common in
contemporary Islamic finance, are generally not healthy for the industry and its stakeholders. Opacity
in financial dealings not only increases the cost of doing business, it makes risk assessment and
management that much more challenging, to both transacting parties and regulators. Some additional
perspectives related to the polemic on the practice of tawarruq are also offered. Finally, some thoughts
on the widespread usage of wa’d as a somewhat indispensable tool in structuring contemporary Islamic
financial instruments as well as the attitude towards risk inherent in structured products vis-à-vis a
reasoned Islamic risk-return paradigm are deliberated upon. |
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