Special issue of The Journal of Risk: Risk sharing in Islamic finance
Introducing a special issue of The Journal of Risk:
Risk sharing in Islamic finance
At the end of August 2015 The Journal of Risk will publish a special issue on risk sharing in Islamic finance, guest edited by Walid Mansour from King Abdulaziz University.
The pivotal feature of risk management in Islamic finance is risk sharing. It can be considered as the major specificity that shape financial innovations. The critique to the conventional finance's risk-shifting technique is that it leads to an unfair outcome. Indeed, Greenspan (1999) argue that derivatives, the standard innovations for shifting risks, are zero-sum contracts. Although the academic literature in finance and economics swarms with conceptual and narrative papers dealing with risk sharing, there is sheer scarcity in the quantitative contributions and empirical works in this regard. The articles published in this special issue fill this gap by investigating a variety of theoretical and empirical issues.
Take a look...
Selected content from the issue is FREE to access! Simply click on the links below:
Don't miss out! Make sure you have access to read all of the papers in this issue:
- Recursive profit-and-loss sharing by Walid Mansour, Mohamed Ben Abdelhamid and Almas Heshmati
- Applying the Cornish-Fisher expansion to value-at-risk estimation in Islamic banking by Hylmun Izhar
- Advanced risk profile analysis of Islamic equity investment: evidence from the American, Asian and European markets by Mondher Bellalah and Zeineb Chayeh
- Commodity risk hedging through risk sharing: reengineering Islamic forwards by Ali Kafou and Ahmed Chakir
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What the experts say...
The principles and precepts of Islamic finance are clearly lacking in mainstream modeling of risk. The integration of such principles into formal models is not a trivial task. And here where the contributions in this issue of Journal of Risk come to play. The contributed articles address various challenges facing the Islamic financial industry. They are original, innovative, and thought-provoking. I hope that the articles will contribute to better understanding of risk, and consequently, to a safer economic world.
Sami Al-Suwailem
Islamic Development Bank, Jeddah, Saudi Arabia
Financial repression imposed by leading countries since 2008 made the financial sector far more riskier and uncertain than the financial environment that crashed in 2008. The interest rate, the key price of capital, had been forced to near-zero level, and there to remain perhaps for generations; reserve currencies became entangled in a depreciation race; stocks too overvalued; and debt kept building up far beyond historical records; mainly by agents whom Minsky called Ponzi borrowers, with no debt servicing capacity making inflation and bankruptcies unavoidable means for paying debt. In such risky, over-indebted, and highly uncertain and speculative environment, Islamic financial institutions, operating in distorted markets, will find in the present collection of papers advanced contributions in risk analysis which may allow them to better assess and manage the risk underlying their investments.
Noureddine Krichene
International Monetary Fund (1986-2009)
About the journal...
The Journal of Risk is an international peer-reviewed journal publishing a broad range of original research papers, aimed at further developing an understanding of financial risk management. As the only publication devoted exclusively to theoretical and empirical studies in financial risk management, The Journal of Risk promotes far-reaching research on the latest innovations in this field, with particular focus on the measurement, management and analysis of financial risk. Discover more...
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Sarah Campbell
Journals Manager