Description
Book SynopsisAntifragility of Islamic Finance: The Risk-Sharing Alternative explains how risk-sharing, as defined under Islamic finance, makes financial systems antifragile. It highlights the benefits of 100% equity-based finance over debt-based finance.
The recent financial crisis has given rise to discussions on a new approach to risk management called antifragility. This concept specifies conditions under which systems become resilient to shocks caused by Black Swanshighly unpredictable outlier events that have a major negative (or positive) consequence when they occur, with their occurrence only explained retrospectively. Per this concept, the long-term survivability of any system centers exclusively on its antifragile nature, that is, its ability to absorb and even benefit from Black Swantype shocks. This book aims to investigate risk-sharing Islamic finance as an antifragile system.
As a by-product of the Great Recession, the problems of debt-based financial systems
Trade Review
“Ten years after the 2007 global financial crisis and 20 years after the Asian financial crisis, you would have thought that mainstream economics would have been discredited for its failure to predict and offer credible solutions for radical uncertainty and fragile financial systems. Umar Rafi and Abbas Mirakhor’s book Antifragility of Islamic Finance: The Risk-Sharing Alternative offers a rare and revolutionary position that the equity and risk-sharing nature of Islamic finance is more robust, resilient, and antifragile than conventional debt finance, which has become concentrated, fragile, and unmanageable. The authors succinctly map the original work of Mandelbrot, Nassim Taleb, and Kahneman into the basic philosophy of Islamic finance. I commend this book as a fundamental building block for the foundations of Islamic finance as mainstream finance.” —Tan Sri Andrew Sheng, distinguished fellow at the Asia Global Institute, University of Hong Kong, chief advisor to the China Banking Regulatory Commission, and one of TIME Magazine's 100 most influential people in the world, 2013.
Table of Contents
List of Abbreviations – Glossary – Foreword – Prologue – The Inconsistencies of Financial Modeling – Introduction to Antifragility – Debt and Destruction – Risk and Reward – A Tale of Two Bubbles – Epistemological Foundation of RSIF – Risk-Sharing Islamic Bank Structure – Risk Management for Risk-Sharing – The Islamic Finance Antifragility Framework – Regulating (for) the Black – Of Ptolemy and Alchemy – Acknowledgements – Bibliography – Index.
