How to order
IMF Publications

Working Papers in full text
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 All


Other research-related activities and publications of the IMF can be found at IMF Research

Free Email Notification

Receive emails when we post new items of interest to you.

Subscribe or Modify your profile



Operative Principles of Islamic Derivatives - Towards a Coherent Theory

Author/Editor: Jobst, Andreas | Sole, Juan
Authorized for Distribution: March 1, 2012
Electronic Access: Free Full Text (PDF file size is 1,234KB)
Use the free Adobe Acrobat Reader to view this PDF file.
 
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: Derivatives are few and far between in countries where the compatibility of financial transactions with Islamic law requires the development of shari’ah-compliant structures. Islamic finance is governed by the shari’ah, which bans speculation and gambling, and stipulates that income must be derived as profits from the shared generation of goods and services between counterparties rather than interest or a guaranteed return. The paper explains the fundamental legal principles underpinning Islamic finance with a view towards developing a cohesive theory of derivatives subject to shari’ahprinciples. After critically reviewing accepted contracts and the scholastic debate surrounding existing financial innovation in this area, the paper offers an axiomatic perspective on a principle-based permissibility of derivatives under Islamic law.
 
Order a print copy
Series: Working Paper No. 12/63
Subject(s): Financial instruments | Islamic banking | Risk management
Author's keyword(s): Derivatives | Islamic risk management | Islamic finance | shari’ah compliance | sukuk | mudaraba | ijarah | murabaha | riba | istisna | gharar | maisir | maslaha.
 
English  
    Published:   March 1, 2012        
            Format:   Paper
    Stock No:   WPIEA2012063   Pages:   32
    Price:   US$18.00 (Academic Rate: US$18.00 )
       
     
Please address any questions about this title to publications@imf.org.