Epistemology of finance: misreading Smith
Before the inception of the Islamic finance industry, there was what could be called a “market failure” in the conventional financial system. There was substantial unmet demand for Shari’a-compliant financial products. Islamic finance grew out of conventional finance to meet this demand. Muslim scholars writing mostly since the 1970s about Islamic finance focused on development of an Islamic finance system; they not only emphasised elimination of riba contracts but urged their replacement with risk-sharing contracts. The practitioners, most of whom had been operating in the conventional finance space, were however interested in developing ways and means of finance that, while Shari’a compatible, would be familiar to and accepted by market players in conventional finance.
Islamic finance , Epistemology
Mirakhor, A. (2011). Epistemology of finance: misreading Smith. Islamic Finance Review, 1(1), pp. 9-15.
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