A theoretical perspective on Islamic banking and financial intermediation
Date
2014
Authors
Lewis, M.K.
Editors
Lewis, M.
Ariff, M.
Mohamad, S.
Ariff, M.
Mohamad, S.
Advisors
Journal Title
Journal ISSN
Volume Title
Type:
Book chapter
Citation
Source details - Title: Risk and regulation of Islamic banking, 2014 / Lewis, M., Ariff, M., Mohamad, S. (ed./s), Ch.2, pp.11-42
Statement of Responsibility
Conference Name
Abstract
As financial intermediaries, Islamic banks collect deposit funds from investors, both by means of mudaraba investment accounts and other deposit accounts, on one side of the balance sheet, and then invest these funds in a variety of Islamically acceptable forms, on the other side. In doing so, they conduct financial intermediation in ways quite different from conventional banks since profit-and-loss modes of finance and investment in trade and commodities via sales-based and leasing contracts feature extensively in their activities. There is a large literature in banking theory and finance that examines the optimality of the interest-based instruments used by conventional banks. In order to explore the differences that may result from substituting the Islamic financing instruments for the conventional techniques of banking, we need to review the theories of financial intermediation.
School/Discipline
Dissertation Note
Provenance
Description
Access Status
Rights
Copyright 2014 Mervyn K. Lewis, Mohamed Ariff and, Shamsher Mohamad