Regulation of Islamic Finance

This seminar will focus on Islamic finance, which has recently been estimated to be a $1 trillion industry that is present in some form in the financial markets of virtually every country worldwide. First, we will study the Islamic legal rules at the heart of Islamic finance to understand how the twin prohibitions of riba (often translated imprecisely as interest) and excessive risk serve as the basic foundations of the industry. We will study lesser-known rules and prohibitions from within the Islamic legal tradition that also shape the development of Islamic financial products. Second, we will examine the growth of Islamic finance in recent years and attempt to map its global presence and trends. Third, we will investigate in depth the regulatory framework for Islamic finance in several significant markets, including the U.S. and countries in the European Union, the Middle East, and Asia. We will look in particular at how the regulators in each jurisdiction treat Islamic financial products, and whether they attempt to specify what qualifies as Islamic or whether they regulate merely the financial aspects of the product, leaving the religious validity to be determined by non-state actors such as the Sharia scholars who advise the Islamic financial institutions. As part of this, we will examine the key role of these Sharia scholars in shaping the industry, consider whether they have a monopoly on interpretation, and discuss alternative ways of regulating the Islamic aspects of Islamic finance. Evaluation for the seminar will be based on class preparation and participation (40%) and a final paper (60%). There are no prerequisites for this seminar.

Catalog Number: BUSCOM 711
Additional Course Information: 1 Draft degree req may be met with class ,  3 draft degree req may be met with class ,  Consult Professor about writing requirements

Course History

Spring 2011
Title: Regulation of Islamic Finance
Faculty: Stilt, Kristen A. (courses  |  homepage)
Section: 1     Type: Seminar     Credits: 3.0
Capacity: 25     Actual: 15