Abstract: Islamic finance as it exists today has been shown to reduce economic efficiency by increasing transaction costs, without providing any substantial economic value to its customers. Many have argued that the industry is actually demand driven, and hence jurists and lawyers engaged in Shariʿa arbitrage provide value, by bringing conventional financial products to a market segment that would not have access otherwise. Thus, proponents of that argument assert, Shariʿa-arbitrage mechanisms should be seen as enabling juristic efforts to recharacterize modern financial transactions (takhrij fiqhi), rather than legal stratagems to circumvent prohibitions (hiyal Sharʿiyya). Moreover, the argument continues, to the extent that Islamic legal restrictions have economic content, the gradual progress of Islamic finance toward increasingly more efficient and more authentically Islamic products will eventually allow the industry to serve the Islamic ideal.
Publication Year: 2006
Publication Date: 2006-07-03
Language: en
Type: book-chapter
Indexed In: ['crossref']
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