Download or read book Risk Sharing Finance written by Saad Bakkali and published by Walter de Gruyter GmbH & Co KG. This book was released on 2021-05-10 with total page 159 pages. Available in PDF, EPUB and Kindle. Book excerpt: The contemporary finance deals mainly with multilateral and multi-counterparty transactions. Islamic Jurisprudence (Fiqh) has yet to develop its conceptualization of this modality of financing. Thus far, it has become a norm for large financing projects to rely on a complex structure of interconnected bilateral contracts that in totality becomes opaque, complex and costly. An unfortunate result of the unavailability of an efficient Fiqhi model applicable to modern multilateral and multi-counterparty contracts has been the fact that the present Islamic finance has been forced to replicate conventional risk-transfer (interest rate based) debt contracts thus drawing severe criticisms of duplicating conventional finance. In 2012, a gathering of some of the Muslim world’s most prominent experts in Jurisprudence (Fuqaha) and economists issued the Kuala Lumpur Declaration (Fatwa) in which they identified risk sharing as the essence of Islamic finance. The Declaration opened the door for a new Fiqh approach to take the lead in developing the jurisprudence of multilateral and multi-counterparty transactions. This Declaration (Fatwa) provides a prime motivation to search for a comprehensive model of risk sharing that can serve as an archetypal contract encompassing all potential contemporary financial transactions. From the perspective of Islamic Jurisprudence (Fiqh), the technicalities of the concept of risk sharing in contemporary finance have yet to be defined in Islamic literature. This book attempts to clarify and shed light on these technicalities from the perspective of Fiqh. It is a comprehensive study that relies on the fundamental Islamic sources to establish a theoretical and practical perspective of Fiqh encompassing risk-sharing Islamic finance as envisioned in the Kuala Lumpur Declaration of 2012. This new paradigm should lead to a more efficient approach to multilateral and multi-counterparty Islamic contracts which, here-to-fore has been lacking in the current configuration of Islamic finance.
Download or read book Risk Sharing in Finance written by Hossein Askari and published by Wiley. This book was released on 2011-08-09 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: How the Islamic finance approach to risk can serve as a model for global reform The recent U.S. financial debacle has affected the entire world and led to major reviews of risk management in financial institutions. Perhaps a simpler alternative is just to adopt the systems used for centuries in Islamic finance. Risk Sharing in Finance expounds upon this novel idea, suggesting that the Islamic financial system can be developed for use around the world by providing a helpful paradigm for crafting global financial reforms. Demonstrating how Islamic finance can successfully expand its array of risk sharing instruments, for example issuing government shares to finance development projects and placing limits on short sales and leveraging, the book makes a compelling case for thinking outside the box to redevelop a vibrant stock market. Provides analysis of the comparative historical, theoretical, and empirical investigation of risk management in both the conventional and the Islamic-type financial systems Explores the benefits and the implications of introducing Islamic finance around the world and explains how wider reliance on risk sharing can be implemented Establishes a connection between the flawed contemporary Western system of capitalist finance and the ancient, traditional forms of risk-sharing prevalent in Islamic finance Offering a timely look at financial reform, Risk Sharing in Finance draws on the expertise of author Zamir Iqbal of the World Bank, along with a host of co-authors Abbas Mirakhor, Hossein Askari, and Noureddine Krichene to present a new form of financial reform.
Download or read book Risk Sharing in Finance written by Hossein Askari and published by Wiley. This book was released on 2012-01-03 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: How the Islamic finance approach to risk can serve as a model for global reform The recent U.S. financial debacle has affected the entire world and led to major reviews of risk management in financial institutions. Perhaps a simpler alternative is just to adopt the systems used for centuries in Islamic finance. Risk Sharing in Finance expounds upon this novel idea, suggesting that the Islamic financial system can be developed for use around the world by providing a helpful paradigm for crafting global financial reforms. Demonstrating how Islamic finance can successfully expand its array of risk sharing instruments, for example issuing government shares to finance development projects and placing limits on short sales and leveraging, the book makes a compelling case for thinking outside the box to redevelop a vibrant stock market. Provides analysis of the comparative historical, theoretical, and empirical investigation of risk management in both the conventional and the Islamic-type financial systems Explores the benefits and the implications of introducing Islamic finance around the world and explains how wider reliance on risk sharing can be implemented Establishes a connection between the flawed contemporary Western system of capitalist finance and the ancient, traditional forms of risk-sharing prevalent in Islamic finance Offering a timely look at financial reform, Risk Sharing in Finance draws on the expertise of author Zamir Iqbal of the World Bank, along with a host of co-authors Abbas Mirakhor, Hossein Askari, and Noureddine Krichene to present a new form of financial reform.
Download or read book Financial Innovation and Risk Sharing written by Franklin Allen and published by MIT Press. This book was released on 1994 with total page 398 pages. Available in PDF, EPUB and Kindle. Book excerpt: Franklin Allen and Douglas Gale assemble some of their key papers along with a five-chapter overview that not only synthesizes their work but provides a historical and institutional review and a discussion of alternative approaches as well.
Download or read book Applying Risk Sharing Finance for Economic Development written by Putri Swastika and published by Springer Nature. This book was released on 2021-09-13 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the application of risk-sharing finance as a national economic policy in history and how it stimulated economic recovery during a short period in Germany between 1933 and 1935. Economic history indicates that risk-sharing instruments have promoted socio-economic development in many parts of the world while risk-shifting methods have imposed huge socio-economic costs on many nations, leading to debt slavery on individual members. This book highlights lessons to be learned from history and argues that risk-sharing is a powerful tool for generating rapid economic recovery and resumption of growth.
Download or read book Islamic Finance Risk Sharing and Macroeconomic Stability written by Muhamed Zulkhibri and published by Springer. This book was released on 2019-02-20 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: The concept of risk-sharing in financial and social contracts is one of the unique features of Islamic finance. Many theoretical studies generally claim superiority of an Islamic financial system based on pure equity and participatory modes of financing, while empirical studies provide mixed results. Studies and discussions are needed to fully understand how Islamic finance could contribute to the ongoing discussion of financial stability. Against this background, this book addresses various aspects of Islamic finance and the risk-sharing mechanism contributions to the overall macroeconomic and financial stability. Undoubtedly, the findings and recommendation from this book should be of great interest not only to future academic researchers in the field of macroeconomic stability and Islamic finance, but also to policy makers and regulators who are keen on drawing lessons from Islamic finance experiences to prevent similar crisis in the future.
Download or read book Wealth Inequality Asset Redistribution and Risk Sharing Islamic Finance written by Tarik Akin and published by Walter de Gruyter GmbH & Co KG. This book was released on 2019-03-04 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: Wealth inequality has been not only rising at unsustainable pace but also dissociated from income inequality because of the fact that wealth is increasing without concomitant increase in savings and productive capital. Compelling evidence indicates that capital gains and other economic rents are mainly responsible for wealth inequality and its divergence from income inequality. The main argument of the book is that interest-based debt contracts are one of the drivers of wealth inequality through creating disproportional economic rents for the asset-rich. The book also introduces the idea of risk-sharing asset-based redistribution, which is a novel and viable policy proposal, as an effective redistribution tool to address the wealth inequality problem. Furthermore, a large-scale stock-flow consistent macroeconomic model, which is step by step constructed in the book, sheds light on the formation of wealth inequality in a debt-based economy and on the prospective benefits of implementing risk-sharing asset-based redistribution policy tools compared to traditional redistribution policy options. The research presented in this book is novel in many respects and first of its kind in the Islamic economics and finance literature.
Download or read book The Basic Analytics of Access to Financial Services written by Thorsten Beck and published by World Bank Publications. This book was released on 2006 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Access to financial services, or rather the lack thereof, is often indiscriminately decried as a problem in many developing countries. The authors argue that the "problem of access" should rather be analyzed by identifying different demand and supply constraints. They use the concept of an access possibilities frontier, drawn for a given set of state variables, to distinguish between cases where a financial system settles below the constrained optimum, cases where this constrained optimum is too low, and-in credit services-cases where the observed outcome is excessively high. They distinguish between payment and savings services and fixed intermediation costs, on the one hand, and lending services and different sources of credit risk, on the other hand. The authors include both supply and demand side frictions that can lead to lower access. The analysis helps identify bankable and banked population, the binding constraint to close the gap between the two, and policies to prudently expand the bankable population. This new conceptual framework can inform the debate on adequate policies to expand access to financial services and can serve as the basis for an informed measurement of access.
Download or read book The Risks of Financial Institutions written by Mark Carey and published by University of Chicago Press. This book was released on 2007-11-01 with total page 670 pages. Available in PDF, EPUB and Kindle. Book excerpt: Until about twenty years ago, the consensus view on the cause of financial-system distress was fairly simple: a run on one bank could easily turn to a panic involving runs on all banks, destroying some and disrupting the financial system. Since then, however, a series of events—such as emerging-market debt crises, bond-market meltdowns, and the Long-Term Capital Management episode—has forced a rethinking of the risks facing financial institutions and the tools available to measure and manage these risks. The Risks of Financial Institutions examines the various risks affecting financial institutions and explores a variety of methods to help institutions and regulators more accurately measure and forecast risk. The contributors--from academic institutions, regulatory organizations, and banking--bring a wide range of perspectives and experience to the issue. The result is a volume that points a way forward to greater financial stability and better risk management of financial institutions.
Download or read book Risk Sharing Finance written by Saad Bakkali and published by Walter de Gruyter GmbH & Co KG. This book was released on 2021-05-10 with total page 159 pages. Available in PDF, EPUB and Kindle. Book excerpt: The contemporary finance deals mainly with multilateral and multi-counterparty transactions. Islamic Jurisprudence (Fiqh) has yet to develop its conceptualization of this modality of financing. Thus far, it has become a norm for large financing projects to rely on a complex structure of interconnected bilateral contracts that in totality becomes opaque, complex and costly. An unfortunate result of the unavailability of an efficient Fiqhi model applicable to modern multilateral and multi-counterparty contracts has been the fact that the present Islamic finance has been forced to replicate conventional risk-transfer (interest rate based) debt contracts thus drawing severe criticisms of duplicating conventional finance. In 2012, a gathering of some of the Muslim world’s most prominent experts in Jurisprudence (Fuqaha) and economists issued the Kuala Lumpur Declaration (Fatwa) in which they identified risk sharing as the essence of Islamic finance. The Declaration opened the door for a new Fiqh approach to take the lead in developing the jurisprudence of multilateral and multi-counterparty transactions. This Declaration (Fatwa) provides a prime motivation to search for a comprehensive model of risk sharing that can serve as an archetypal contract encompassing all potential contemporary financial transactions. From the perspective of Islamic Jurisprudence (Fiqh), the technicalities of the concept of risk sharing in contemporary finance have yet to be defined in Islamic literature. This book attempts to clarify and shed light on these technicalities from the perspective of Fiqh. It is a comprehensive study that relies on the fundamental Islamic sources to establish a theoretical and practical perspective of Fiqh encompassing risk-sharing Islamic finance as envisioned in the Kuala Lumpur Declaration of 2012. This new paradigm should lead to a more efficient approach to multilateral and multi-counterparty Islamic contracts which, here-to-fore has been lacking in the current configuration of Islamic finance.
Download or read book Public Private Partnerships In Pursuit of Risk Sharing and Value for Money written by OECD and published by OECD Publishing. This book was released on 2008-05-21 with total page 145 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book highlights good practices and summarises what countries should consider before entering into public-private partnerships (PPPs).
Download or read book Household Financial Access and Risk Sharing in Nigeria written by Stacy Carlson and published by International Monetary Fund. This book was released on 2015-07-22 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the role of household financial access in determining the extent of risksharing in Nigeria using household-level panel data. We estimate changes in the response of consumption to shocks for households with formal and informal access to finance and those without, both for the country as a whole and for different regions. Our findings suggest that households with financial access who experience an unexpected negative income shock see consumption fall by 15 percentage points less than those without access. This result is mainly driven by households with informal financial access, and by household savings rather than borrowing. Regional variation in risk sharing tends to be significant, suggesting that financial inclusion efforts going forward should have a more regional focus.
Download or read book Risk Adjustment Risk Sharing and Premium Regulation in Health Insurance Markets written by Thomas G. McGuire and published by Academic Press. This book was released on 2018-08-06 with total page 648 pages. Available in PDF, EPUB and Kindle. Book excerpt: Risk Adjustment, Risk Sharing and Premium Regulation in Health Insurance Markets: Theory and Practice describes the goals, design and evaluation of health plan payment systems. Part I contains 5 chapters discussing the role of health plan payment in regulated health insurance markets, key aspects of payment design (i.e. risk adjustment, risk sharing and premium regulation), and evaluation methods using administrative data on medical spending. Part II contains 14 chapters describing the health plan payment system in 14 countries and sectors around the world, including Australia, Belgium, Chile, China, Columbia, Germany, Ireland, Israel, the Netherlands, Russia, Switzerland and the United States. Authors discuss the evolution of these payment schemes, along with ongoing reforms and key lessons on the design of health plan payment. Provides a conceptual toolkit that describes the goals, design and evaluation of health plan payment systems in the context of policy paradigms, such as efficiency, affordability, fairness and avoidance of risk selection Brings together international experience from many different countries that apply regulated competition in different ways Delivers a practical toolkit for the evaluation of health plan payment modalities from the standpoint of efficiency and fairness
Download or read book Comparing Financial Systems written by Franklin Allen and published by MIT Press. This book was released on 2000 with total page 524 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why do different countries have such different financial systems? Is one system better than the other? This text argues that the view that market-based systems are best is simplistic, and suggests that a more nuanced approach is necessary.
Download or read book Risk Sharing Within the Firm written by Marco Pagano and published by . This book was released on 2020-10-13 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: Labor income risk is key to the welfare of most people and this risk is mainly insured "within the firm" and by public institutions, rather than by financial markets. Risk Sharing within the Firm: A Primer starts by asking why such insurance is provided within the firm, and what determines its boundaries. It identifies four main constraining factors: availability of a public safety net, moral hazard on the employees' side, moral hazard on the firms' side, and workers' wage bargaining power. These factors explain three empirical regularities: family firms provide more employment insurance than nonfamily firms; the former pay lower real wages, and firms provide less employment insurance where public unemployment benefits are more generous. This monograph also explores the connection between risk sharing and firms' capital structure. It concludes by showing that risk sharing within firms has declined steadily in the last three decades, and by discussing the financial, competitive, technological and institutional developments that may have conjured this outcome.
Download or read book Risk Factors And Contagion In Commodity Markets And Stocks Markets written by Stephane Goutte and published by World Scientific. This book was released on 2020-04-28 with total page 355 pages. Available in PDF, EPUB and Kindle. Book excerpt: The link between commodities prices and the business cycle, including variables such as real GDP, industrial production, unemployment, inflation, and market uncertainty, has often been debated in the macroeconomic literature. To quantify the impact of commodities on the economy, one can distinguish different modeling approaches. First, commodities can be represented as the pinnacle of cross-sectional financial asset prices. Second, price fluctuations due to seasonal variations, dramatic market changes, political and regulatory decisions, or technological shocks may adversely impact producers who use commodities as input. This latter effect creates the so-called 'commodities risk'. Additionally, commodities price fluctuations may spread to other sectors in the economy, via contagion effects. Besides, stronger investor interest in commodities may create closer integration with conventional asset markets; as a result, the financialization process also enhances the correlation between commodity markets and financial markets.Our objective in this book, Risk Factors and Contagion in Commodity Markets and Stocks Markets, lies in answering the following research questions: What are the interactions between commodities and stock market sentiment? Do some of these markets move together overtime? Did the financialization in energy commodities occur after the 2008 Global Financial Crisis? These questions are essential to understand whether commodities are driven only by their fundamentals, or whether there is also a systemic component influenced by the volatility present within the stock markets.
Download or read book Risk Transfer Vs Risk Sharing written by Leslie Terebessy and published by Independently Published. This book was released on 2021-04-17 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Risk is the possibility of an adverse or disastrous outcome of a given action. Risk arises out of the fact that our knowledge, in particular our knowledge of the future, is limited. While the past may be relatively well known, future is unknown. It is tempting to predict the future on the basis of the past, according to the dictum, "history repeats itself." However, no single model takes into account all variables that may influence the outcome of a given act. The existence of risk implies a limit on our ability the control our fate. Some contingencies may be unforeseen. While science attempts to control the environment, inclusive of future events, history has shown repeatedly that human control is always incomplete. Complete control rests only with God. Risks arise in all walks of life. A person driving through a red light takes a risk of getting involved in an accident. A smoker takes the risk of developing cancer. A gambler takes the risk of losing money. There is a risk of fire, or the risk of becoming a victim of crime. There is a risk of being kidnapped, being mistaken for someone else, or the risk of becoming an innocent victim. There is also the risk of physical or psychological injury, illness or an outbreak of epidemic, on a local or a global scale. Natural disasters, such as floods, earthquakes or tsunamis also present risks. There is also a risk of war, civil war, or even a world war. There is a risk of political instability (rioting or a coup d'état). There is a risk of property loss or damage, or a risk of disgrace (damage to one's reputation). Everything from wearing protective clothing, starting a retirement fund, to spending on defence is a different way of shielding oneself or one's community from risk and the fundamental insecurity that characterises all human existence. Risks can be divided into avoidable and unavoidable. Avoidable risks, such as the risk of loss arising from gambling (qimar), are self-imposed. In order to avoid such risks one merely needs to abstain from the activities that give rise to them. Other risks, such as the risk of losses in business, may be unavoidable. In principle, unavoidable risks are permitted, but avoidable are not. Hence, risk taking is permitted in business but not in gambling. The fact that risk in business is unavoidable makes it fundamentally different from risks such as arise in gambling. In gambling, one party can win only if another loses. Gambling is thus a "win-lose" or "zero sum game." By contrast, partners in business gain or suffer a loss together. In finance, risks arise in both investment as well as in lending. The main risk in investment is the risk of losses. The main risk in lending is the risk that borrowers may fail to repay their loans to creditors. This risk is known as credit risk, also known as the risk of default or more simply as counterparty risk. A common method of protecting against credit risk is simply to withhold lending from all borrowers unable to post acceptable collateral. At the company level another method is for lenders to purchase credit derivatives such as credit default swaps (CDS), effectively a form of insurance on debt. Another risk that arises in lending is interest risk. This is the risk that interest rates may change in an unfavourable direction. A common method of protection against interest risk is to enter into interest rate swap (IRS) contracts. Liquidity risk arises in both lending and investment. This risk arises from the fact that it may become difficult if not impossible to liquidate securities, whether stocks or bonds, at a time of crisis. Liquidity crises commonly take place when investors wish to liquidate their assets at the same time. Selling pressure drives prices down and makes it impossible to liquidate securities at any but rock bottom prices. This is essentially what transpired during the recent 2008 global financial crisis.
