S. Islamic Finance, Investment and Banking

The course explores contemporary Islamic finance (commerce and finance in accordance with the principles and precepts of Islamic Shariʿah) from a transactional vantage. The emphasis is on structuring financial transactions and structures and understanding risk allocations in those structures. The primary Islamic finance structures are considered, with attention to how they are implemented to accommodate different systemic constraints. Islamic finance is examined: (a) as an application of Islamic religious law and ethics (Shariʿah and related interpretive modalities) in secular systems whose principles often conflict with Shari’ah precepts; (b) as an effort to create and operate a Shariʿah-compliant economic system, including capital markets, without riba (interest) payments and receipts and based upon a compliant risk-reward paradigm that maintains expected returns for transactional parties; and (c) as an example of change in law and change in a financial industry.