Islamic Finance: The New Regulatory Challenge

Because it is entirely equity–based, rather than credit–based, Islamic finance is immune to the speculative bubbles and runaway volatility typical of Western finance. Especially now, in the wake of the global financial crisis, this has made them increasingly attractive to institutional investors, asset managers and hedge funds in search of more stable alternatives to conventional financial products. With interest in Islamic finance swiftly spreading beyond the Muslim world, the need among finance and investment professionals has never been greater for timely and authoritative information about the rules governing Islamic finance. This thoroughly updated and revised second edition of the premier guide to regulatory issues in Islamic finance satisfies that need.

• Addresses the need for banks to develop common Islamic–based international accounting and auditing standards
• Clearly explains the key differences between Shari′ah rulings, standardization of acceptable banking practices, and the development of standardized financial products
• Explores the role of the Shari′ah Boards in establishing common rules regarding the permissibility of financial instruments and markets
• Offers guidance for regulators seeking to adapt their regulatory frameworks to the needs of the fast–growing Islamic finance sector

SIMON ARCHER is a Visiting Professor at the ICMA Centre, Henley Business School, University of Reading, UK, with responsibility for Islamic finance. He served as Professor of Financial Management at the University of Surrey and worked as Midland Bank Professor of Financial Sector Accounting at University of Wales, Bangor. Professor Archer studied Philosophy, Politics and Economics at Oxford University, and worked as a Chartered Accountant with Arthur Andersen in London before moving to Price Waterhouse, Paris, where he became a partner in charge of management consultancy services. He has consulted to the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). He has authored many books and academic papers on international accounting and issues in Islamic finance.

RIFAAT AHMED ABDEL KARIM has been the Chief Executive Officer of the International Islamic Liquidity Management since October 2012. He has been Visiting Professor, ICMA Centre, Henley Business School, University of Reading, UK, since 2008. He has played a pioneering role in the development of Islamic finance, while his leadership in drafting accounting, auditing, governance, Shari′ah, and regulatory standards has been instrumental in establishing the position of the Islamic financial services industry in the mainstream of global banking. He was secretary–general of the Islamic Financial Services Board (ISFB) and secretary–general of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). In addition to international recognition of his academic publications, which are mainly in tier–one international journals, in the field of Islamic finance, Professor Karim has garnered numerous accolades for his pioneering work, including the first Euromoney Outstanding Contribution to the Development of Islamic Finance Award.