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Equity‐Based, Asset‐Based and Asset‐Backed Transactional Structures in Shari’a ‐Compliant Financing: Reflections on the Current Financial Crisis *
Author(s) -
Abdul Aziz Razi Pahlavi,
Gintzburger AnneSophie
Publication year - 2009
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/j.1759-3441.2009.00035.x
Subject(s) - securitization , finance , financial crisis , business , asset (computer security) , equity (law) , structured finance , transactional leadership , financial system , economics , computer security , management , computer science , political science , law , macroeconomics
This paper presents interest‐free equity‐based, asset‐based and asset‐backed transactional structures endorsed by Shari’a ‐compliant finance. These structures could explain the potential and relative insulation, yet not immunity, of Islamic financial institutions from the financial crisis. Although Shari’a ‐compliant financing cannot solve the current financial crisis, the recovering market could consider incorporating some of the insulating principles underlying Shari’a ‐compliant financing and securitization products, as exemplified in the sample of Shari’a ‐compliant products in this paper, so as to offer better consumer protection.