On the significance of "trust" for Islamic financial industry : lessons from the financial crisis of 2007-8
Joint Authors
Source
Journal of Islamic Business and Management
Issue
Vol. 5, Issue 1 (30 Jun. 2015), pp.17-36, 20 p.
Publisher
Riphah International University Riphah Centre of Islamic Business
Publication Date
2015-06-30
Country of Publication
Pakistan
No. of Pages
20
Main Subjects
Economy and Commerce
Islamic Studies
Topics
- Financial institutions
- Islam
- Social capital
- Financing
- Finance
- Financial policy
- Financial markets
- Risk management
- Professional ethics
- Religious aspects
- Global Financial Crisis (2008-2009)
- Integration
- Moral hazard
Abstract EN
The notion of "trust" as social capital and an intangible asset has been discussed in the literature for some time but the financial crisis of 2007-8 has highlighted the significance of "trust" with respect to corporate governance, business ethics, confidence in leadership and policy-makers, and on financial system and the markets.
In this paper we assessed the key triggers of the recent financial crises as it relates to issues of moral hazard and lack of transparency on the nature of financial instruments.
We argue that this led to the lack of trust in financial systems.
We provide analytical and descriptive quantitative evidence that Islāmic financial institutions undertake a sacred duty for their clients whose trust in them is invaluable.
Any damage to this trust can have consequences not only for an individual institution, but can also have grave precautions for the industry as whole.
The paper concludes that trust is vital to developing well-functioning financial systems.
Moreover, transparency on the nature of Sharī‘ah compliant financial contracts should go hand in hand with developing financial literacy to ensure deepening trust in the financial system and its ability to support growth and economic development.
American Psychological Association (APA)
Iqbal, Zamir& Rustum, Ahmad. 2015. On the significance of "trust" for Islamic financial industry : lessons from the financial crisis of 2007-8. Journal of Islamic Business and Management،Vol. 5, no. 1, pp.17-36.
https://search.emarefa.net/detail/BIM-626842
Modern Language Association (MLA)
Iqbal, Zamir& Rustum, Ahmad. On the significance of "trust" for Islamic financial industry : lessons from the financial crisis of 2007-8. Journal of Islamic Business and Management Vol. 5, no. 1 (Jun. 2015), pp.17-36.
https://search.emarefa.net/detail/BIM-626842
American Medical Association (AMA)
Iqbal, Zamir& Rustum, Ahmad. On the significance of "trust" for Islamic financial industry : lessons from the financial crisis of 2007-8. Journal of Islamic Business and Management. 2015. Vol. 5, no. 1, pp.17-36.
https://search.emarefa.net/detail/BIM-626842
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 34-36
Record ID
BIM-626842