Islamic Financial Instruments Author(s): Rodney Wilson Source: Arab Law Quarterly, Vol. 6, No. 2 (1991), pp.

205-214 Published by: BRILL Stable URL: http://www.jstor.org/stable/3381836 . Accessed: 07/01/2014 07:20
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ISLAMICFINANCIAL INSTRUMENTS
Dr RodneyWilson*

INTRODUCTION

This paperaimsto reviewrecentdevelopments in financial instruments internationally and examine the relevanceof this experiencefor Islamic finance. What financial instruments haveprovedthe mostsuccessful in termsof clientappealandefficiency in financialintermediation? Is there a trade-offbetweenpopularityand suitabilityfor modernfinancialtransactions? Does the needfor a market in financialinstruments to functioneffectivelyconflictwith equityand distributional considerations? Is a financial marketwith a "humanface"possible,and can a moraldimensionbe introduced when designingnew financialinstruments? Clearlymany of these questionsare of vital concernto protagonists of and practitioners in Islamicfinance.

The Issue of Definition It is perhapsan obviousstartingpoint to definewhat exactlyis meant by the term "financialinstruments". Instrumentsare often equatedwith securities,and an importantcharacteristic is considered to be theirtradability. This does not merelymean the fact that they are purchased when first issued,or repurchased on redemption. It also usuallyimpliesthat the instruments are tradable on secondary markets.Bonds, for example,areperhaps the mostuniversally recogliised typeof financial instruments, as most purchasers acquiresuch securities in orderto tradethem in secondary markets,and only a smallproportion of market participants will be seeldngto hold bonds until maturity. With the processof securitisation of financialmarketsin recent years, there has been an enormousincreasein both the value and varietyof financialinstruments available.Certificates of deposit are a case in point, as this has enabledbanks and otherfinancialintermediaries to tradetheirdepositsamongsteach otherin secondary markets.The possibilityof such asset tradinghas given banks a useful additional sourceof liquiditywhich can be drawnuponif unforeseen liabilitiesarise,such as a suddenspate of depositwithdrawals. Althoughoriginallyenvisagedas a methodof meetingwith contingencies, certificates of depositsare now regarded by many as a ritaltool of liquiditymanagement.
*Reader in Economics, Universityof Durham.

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Financialinnovationhas resultedin the emergence of significant markets in instruments such as futuresandoptions.Thesearenow tradedin most major financial centres,and are regarded as important tools for riskmanagement. Such instruments are by naturemuchmoredifficultto evaluatein terrns of theirworthovertime and yield, but the adventof computerised portfoliomanagement systemshas facilitated the tracking of such securities. The Borderline for Financial Ittstrllments The questionmust of coursebe askedif all securities arefinancial instruments, or if the lattertermshas a morerestricted meaning. Thereis clearlya riskwithbonds,but it is a measurable riskas long as thereis no default.Thereis short-term uncertainty overfutureassetvalues,but no long-terrn doubtoverultimateworthor even return. Information flows are near perfect,and marketsare usuallyefficient. Optionsand filturesare clearlymorerisky,and certificates of depositin some respectsless risky, but all represent one class of financialproduct. Equities or quotedcompany stockareclearlyin a different category, as information is much less perfect,and risk harderto quantify precisely.Formulatradingcan of coursebe used,andtrigger mechanisms for buyingandsellingarenow common,but judgment is muchmorelikelyto be involved. Ultimately it is the performance of the public companies themselves whichwilldetermine profitability, andthisis affected by thequalityof their managements and workforces. Shareceriificates are in any case titlesto property, with mostof the rightsandsome,but not all, of the obligations that thisinvolvesin the case of quotedcompanies. Despitetheirtradability, it is doubtful that equitiescan reallybe regarded as financial instruments in the purestsenseof the term. Unit trustsaresometimes regarded as a typeof financial instrument, as they arean indirect means of acquiringequities, with less risk because of the spread of shareholdings usuallyinvolved,and lowertransactions costs than those incurred by building up the sameportfolio through the directpurchase of the underlying shares. It is the lowerlevel of riskand the fact that they represent intermediate assets between the financeandthe underlying property thatmakesthemhavemoreof the characteristics of a financialinstrurnent. The samecouldbe said of the sharesof investment companies whose main purposeis to placefimdswith other companies. With such companies the nsks aregreater however, as theycanborrow unlikeunittrusts,andthe value of theirsharesdoes not necessarily reflectthat of the compariies in whichthey place theirown shareholder's inds. Instruments of Trade Often paperswhich are used to facilitateinternational transactions are regarded as financial instruments, especially when thereis a market for the paperitself,and the risk factoris limitedwithin naxTowly determined parameters. Perhapsthe best example of such instruments are bills of exchange, whichhistorically wereone of the most important meansof financing bothexportsandimports. A bill of exchange is a

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ISLAMIC FINANCIAL INSTRU1ZENTS

promise to paya specified sumat a filture time,rather likea postZated iimeperiod is usually cheque. setin advance The to coincide approximately traded with goodsin question, the delivery ofthe andthe bill is written by the importer exporter. in favourof the Onreceipt of thebilltheexporter caneither cashequivalent, andthencollect or elsesellit at a discount, holdit to maturity, the andobt cashimmediately, obnously bepreferable which Eomthepoint svill of lrieW of liquidity. will Theamount reflect boththeiimeperiod ofthediscount to maturity and the risk of default. eliated if the exporter The latter canbe has the bill "accepted", which means guarantees that thepayment the in theeventof default. acceptor Mostmajor service, banks as didthe specialist pronde thistypeof accepting houses in the London A charge market. is of course madeforacceptances, butthebanks vices keeprecords whichprovide of goodandbadrisks, suchserand are usually in a individual stronger exporters position to ensurethat importers than the cotments they have made in writing thebillsin thefirstinstance. honour Oncebillsof exchange become verytradable areaccepted they financial instruments, whosemarket maturity value dateandinterest will be related to ratesin alternative markets, thought involve thebillsof exchange no interest element in themselves. Likeothertradable financial instruments) participants in the market exchange viewthemas somewhat for billsof detached Eom the underlying represent themeans goods for ofpayment. which they Thisis lessthecasewith though documentary cheapter to arrange, credits which relate directly to theexports andimports ments canonlybe effected themselves. Paywhenthe necessary shipping evidence documents thatthegoods areproduced as havebeendispatched orforwarded. the Thereis a sensein which paper is muchmoreclosely connected to the realphysical makes transaciions, documentary butthis credits a much less perfect of instrument, asthere less easilyquantifiable are so many types risks involved. Indeed many would credits notregard as financial documentary instruments. The Moral Acceptabilityof Financial Instruments There hasbeenvirtually no questioning concerning ethical or distributional relaiion to thefinancial issuesin instruments which are traded in major internatonal Western markets andthe economies. Matters of fess, eqliityandjusiice simply notbeenaddressed. in exchange have It is implicitly assumed Lhat theparticipants kets aretrained in such marprofessionals whoknowhowto lookafter actions themselves. involve Most-transintermediaries who arebuying andselling on and other financial behalfofbusiness clients institutions. Themarkets areof a with ie ordinary nature, andthelinks citizenare remoteandindirect.wholesale The feelingof economists finance specialists is thatsuchmarkets and are best subject to minimal etomental orofficial regulation, as govinterveniion might onlyreduce market extremes efficiency mightkillthe market. andif taken to Is this lackof concern for the morality of the market between justified? Do transaciions specialist dealers andfinancial insiituiions need to be scruiiny as thosebetween subject to the same private individuals ordoesthecorporate nature of thepar-

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ticipantsmeanthat different considerations shouldapply? How accountable to their individualclients and shareholders shouldinstitutionsbuyingand selling financial instruments be in any case? In any marketsituaiionthere are alwaysuneven outcomesin the sense of there beingwinnersandlosers,but the questionis how greata gainis sociallyacceptable, andthe extentto whichlosersshouldbe penalised? It is not clearthatthe stateshould attempt to prevent theseoutcomes whicharepartof the incentive mechanism, though it maywish to limitextremescenarios. Clearlyin a market in whichonly insiituiions with considerable resources participate, thereis less worryaboutdistributional criteria.Nevertheless a seriesof errorsin decision-making can drivean insiituiionmto insolvency and ultimatebankruptcy, whichwill inevitably resultin loss of employee incomeandevenunemployment. Therewill alsobe lossesforclientsof the insiinltion, and shareholders may unwitiinglysee theirassetsbecomesuddenly valueless.Is all this to be accepted as an unavoidable outcomeof market forces? Justice and Equity Thereareno easysoluiionsto the moraldilemmas whicharisein dealings in financial markets. Religiousteachingcan providesome pdance, and despite varying viewpoints on manyissuesfiom dose withdifferent beliefs, thereappears to be almostuniversal concernwith the &ndamental issuesof jusiiceandequity.The latterdoes not mean equality,however, but ratherthat the dipty of "losers" shouldbe protectedX and that everyone has the rightto a certainbasicmaterial provision. Forthe successfill, the stressis noton the limitation of material wealth,but rather thatthe "winners" should recopse and discharge theirsocialresponsibilities in a propermanner. As far as market conductis concerned, the stressis on honestandfairdealings, as any fraudis clearlymorally reprehensible. The latterdoesnot merelyreferto cheating onpayments,but also knowinglyproviding false information in orderto deceive. There is of coursea distinciion betweenthis andwitholding informaiion, one beingan entirely negaiiveact,andthe latterthefailure to actin a positive fashion. Ofien econb mists can pointto a conflictbetweenequityandefficiency in pcular market situaiions. The probability of a trade<ffbetween jusiiceandefficiency is muchless likely. Indeed one can facilitatethe other. Full disclosureof informaiion is certly an important &ctorin reducing bothriskandtransaciions costs,andcanbe regarded as a prerequisite for marketeffeciency The Islamic View of Acceptable Trading Behaviour Islamic scholars viewtrading as botha necessary andpotentially productive economic aciivity. Trading is highlyregarded as an occupation, andindeedthe Prophet himself took an activeinterestin tradematters) both as a pariicipant and as an arbitrator of what was fair and just. Becauseof this involvement in commerce, the Prophet was well awareof the dubiouspracticesthat could occur in trade fi*om first-hand experience of dealingsin Mecca and Medina.The concernwith accurateweightand

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measuresfor tradedcommodities can be interpreted in a moderncontextin termsof filll disclosure andthe necessityto provide comprehensive information to trading partners. The highestmoralstandards shouldbe expectedfromtraders, with no exploitative behaviour towardsthose who are in a weakerbargaining positionbecauseof a lackof resources. There is of coursean emphasison honestyin all dealings,but the trader's responsibility goes well beyondthis. If tradingis viewed as productiveand socially desirable,then speculativebehaviouris clearlyprecluded. The latter is virtuallyby definition both unproductiveand socially undesirablebecause of its potentially exploitative nature.Speculation canbe bothdeliberate andunintentional, but because of the moralunambiguity of the latter,practiceswhich might result in speculation shouldbe avoided. It is for this reason that forward,filturesand optionsdealingare viewed as pb tentiallycorrupting by modernspecialistsin Islamicfinance.Such transactions may be prompted by the desireto hedgeor gainfromarbitrage, whichis admittedly quite differentfrom speculation.The problem,however,is that it is the speculators who providethe liquidityin the marketfor such activitiesto be effective.Those who pariicipatein hedgingor arbitrage are therefore indirectlybenefiting from, and to some extent encouragmg, specuatlon. Hedgingto avoid risk representsa form of insuranceprotection.There is an extensiveliterature in Islamiceconomicsdealingwith insurance matters,and the views of these writersmust be takeninto accountwhenconsidering the legitimacy of hedging. Arbitrage gainsaremadethroughthe exploitation of information that othermarket pariicipants do not have available.Such an activitymay be deemedinherently unfair,and counterto the emphasisin Islamicthinkingon marketbehaviour already mentionedon the need for filll disclosure.
* .

Riba and Modern Finance Undoubtedly the best knowntenetof Islaic teachingon financeis the prohibition of nba or dealing in interest. Though knowledgeof this prohibitionis widespread amongstparticipants in international financialmarkets,the reasonsfor and consequences of the Islamic position on interest remain poorly understood.Those involvedin the design, marketingand dealingin financialinstrumentshave little appreciation of the thinkingof Musliminvestors. The objectionto interesttransactions is becauseof the Koranic injunctions andthe Shari'alaw, with the relevantpassagesandstatutesoftencited.Less emphasisis perhapsput on the rationale for the prohibition, as if this was almostself-evident, but the grounds of injusticeanddistribution of riskandrewardare appreciated, even by nonMuslims.The immorality of unproductive rewards andreturns for time preferences is not as well comprehended, althoughthis challenges the essenceof neoclassical distributiontheorywith respectto the yield on capitaland much of the modernWestern literaturein the field of finance.

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ARAB LAW QUARTERLY

Interest Returns and Zero Coupon Bondls Bondsareregarded as the classicfinancial instrument because of theirsimplicity and tradability, but interestis both a directreturnand a determinant of capitalvalues. Bonds are often acquiredand held for speculative purposes,and their very desiF invitessuch use. Henceconventional bondsmust be considered totallyunacceptable financialinstruments from the standpointof Islamicfinance.Can an Islamically acceptable bondbe designed, andwouldsuchaninstrument haveanyof the characteristics of a bond?Is there a need for such an instrument in any case if sausfactory Islamicalternatives are available whichcan servea similarpurpose? It is of coursepossibleto have zero couponbondswhichby definition yieldno interest,and such instruments at first sit wouldappear to be Islamically acceptable. The difficulty is that such bondsare usuallyissuedat a discountto buyersto make them attractive purchases in relationto alternative securitiesin the market.This, someassert,resultsin the discountbeingrelatedto andperhaps evendeterrnined by the interestreturnson compeiingsecurities. This proposition restson two assptions, however, whichneedto be challenged. Ae firstconcerns de natureof the competing instruments. 1 he secondis the moral conductof the investors in theirinvestment decision-making. Zerocouponbondscan be legiate instruments for the Musliminvestorto buy andhold provided certain conditions aremet.Theseconditions arein somedegree deterniined by the be-haviour of the bondholders themselves, both individually and collectively. If the Musliminvestoris only prepared to hold zero couponbonds,and the alternativeassetsaremudaraba, musharaka, andmurabaha holdings, thenthe discount on the zero couponbondsis relatedto the returnson Islamicfinancial instruments and not those on ribabasedinstruments such as conventional bonds.To ensuresuch an outcomethe zero couponbond sale may have to be restricted to a certainclass of buyers,such as the citizensof an exclusively Muslimcountry, Muslimbelievers only or thosewiAg to give an undertaking, regardless of relgion,that they will not purchaseinterestbasedsecurities. The placement of suchbondscouldalsobe restricted to the commercial banks of a Muslimcountry wherefinancial dealings arein accordance with the Shan'alaw, or Islamlcfinancialinstitutionswhose own dealingsconform with this law even in a non-Muslim environment. AfteradvicefromMuslimjurists,the SaudiArabian Monetary Agencydecidedto issue securities of this type, whichprovided the local commercial bankswith usefi liquidity, and at the sametime raisedfimdingfor the state.Similarissueshavebeen madein a number of otherMuslimcountries, andprovided theconditions outlined are fulfilled,therewouldseemto be no grounds for objecting to such secllrities. Certificates of Deposit

.slamic

II1Western financialmarkets, especiallyin ti IJnitedStates,certificates of deposit haveassumed a Fowing significance in recentyears.Theycanbebotha usefultoolfor liquidity management anda saferalternative to bondholdings. As the interest rateson

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suchceriificates is related to thoseprevailing in themarket generally, thevalueof the ceriificates doesnot varyappreciably fi*om the redemption price. Assuchcertificates arenbabased, theyareclearly unacceptable instruments fiom theIslamic pointof view It should, however, be possible to havecertificates based sn mudaraba deposits which could be tradable atthesecondary market level.Unlike conventional certificates of deposit) the market valueof the certificate mightvaryap preciably fromtheredempeon price, as thereturns on theunderlying deposits would onlybeknown retrospectively rather than in advance. Furtherrnore, thereturns would depend either ontheprofits of theIslamic bank issuing thecertificates, orontheprofits on theunderlying investments where thecertificates werebased on a specified investmentaccount. Islamic ceriificates of deposit would therefore involve a riskelement, whichcould onlybe assessed through suchdevices as raiional or adapiive expectanons, although eventhesewould befarfromcert approaches foresiimating likely returns. Nevertheless if theceriificates areredeemable within a specified timeperiod, thislirnits the risks involved, asin thecaseof bonds. Inpractice, returns would bedetermined at the microlevelof the individual Islamic bankor Muslim business, as it is theirprofits whicharethe keyfactor. Incontrast thereturn on conventional bonds andcertain typesofcertificate deposit depends moreon government monetary policyandbudgetary developments at the macroeconomic level.Theproblem withthisis thatsuchfactors areoutside thecontrol of the banksissuingthe certificates of depositors. Fortunately in the case of Islamic certificates of deposit this wouldnot be the case andtherefore the issuers musthaveresponsibility towards purchasers andholders of theirsecuriiies. The Islamic banks portfolio is of course a movein thedirecionof Islamic certificatesof deposit. Thisscheme waslaunched bytheIslamic Development Bank in 1987, andthemajority of commercial Islamic banks haveagreed to pariicipate. TheIslamic Development Bank hassoldIslamic securities to thecommercial Islac banks, thus acquiring addiiional private financing. Thebanks fortheirparthaveacquired sound liquid instruments whichcanpotentially be resold to otherIslamic banks forcashor alternauvely totheIslc Development BankInpraciice there hasbeen little trading, as the amounts involved are modestby internaiional standards, but moreaciierity is likely as the scheme expands. Returns arebased on theIslc Development Banks profits fromtrade financing, its mostsuccessfill aciivity. InstrumentsRelating to Islamic Trading Trade between Islamic statesandbetween Muslim clientsandWestern countries has beenincreasingly financed on themurabaha mark-up principle in recent years. Under this systemthe Islamic financial instituiion purchases the import on behalfof the Muslim client,andthe latteragrees to repurchase the goodat a laterdatewiththe priceadjusted upward by a specified amount. This system permits the importer to obtain credit without interest untilthegoodin quesiion is received, or evensoldto a localclient.It represents an alternaiive to financing through billsof exchange which

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than,conveninvolveriba,andis in manywayssimilarto, butmoreacceptable would credits. documentary tional andthe Islamic transactions, forthe financial the security goodprovides The traded of the goods ownership and to title the over takes actually institution or financial bank or mark-up the justifies which this is it and This meansit assumesa risk, inquestion. and businessmen, Muslim for attractive Such financinghas provedhighly reward. represuchtradefunding Indeed, andIslamicbanksoffersuchfacilities. bothWestern for accounts and banks, Islamic most activityof sentsthe majorpartof the financing assetholdings. thebulkof short-term are not, unless the fiinstruments Thoughthe goods are traded,the m2wrabaha mark-upis paid are the and when the fimdingis advanced nancialtransactions level. at theprimary trading as If it is, thenit wouldbe categorised as trading. regarded institutions financial betweenthe Islamic are not traded instruments Suchmurabaha Thereis no reasonon in the securities. market secondary no is there as themselves, and indeedsuch gounds why thereshouldbe not be such a development, religious with all the market, couldforma usefulbasisfor an Islamicinter-bank instruments involved. benefitswhichthat couldbringfor the pariicipants Stock Exchange Development the worldreflecting in the Islamic of financeis quiterestricted of sources Thediversity Most businessfinanceis fromploughed-back of capitalmarkets. limiteddevelopment or moredistantfamily fromcloserelatives usually is borrowing andlong-tellll profits, andothershortfinancing trade for sought only are loans bank Commercial members. or provide property mortgage to reluctance a is there partlybecause terrnpurposes, control, family of loss the in result ultimately could which collatoral otherlong-term or even the eniirefamilybusiness. Islamic For the same reasonsmall businessclients have been slow to approach were institutions these though even financing and musharaka banksfor mudaraba were they enterprises the over take to desire only tryingto be helpful,and had no in financing trade murabaha on funding.Islamicbankshave tendedto concentrate of matter deliberate any of result a as not of theirclients,and to the demands response policy. to seekequityfinanchavebeenreluctant in Moslemcountries businesses If private to raise filndingby reluctant more ing from Islamicbanks,they have been even areunderdeveloped markets with quotedshares.Equity publiccompanies becoming stageof developthe and but this reflectsculturalattitudes in mostIslamiccountries, MiddleEastern only the was policy.Kuwait or government thanideology ment,rather was butmuchof the activity in the sharesof stockexchange, witha significant coulltry hasanincreasingly In the FarEastMalaysia businesses. productive not directly banks, this It is perhaps in Indonesia. aregrowing andtransactions stockexchange, important potential. areaof the Islamicworldthat has the greatestfinancial

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Equity Related Fmancial Instruments It wouldbe stretchingdefinitionsconsiderably to view equitiesor ordinarysharesas financialinstruments.Despite theirtradability, they are inherentlyrisky assets,and manyvariables must be takeninto accountin defiIiing and quantifying the natureof the risks. In addition,they representpropertyrights rather than merely financial certificates.Equitiesare acquired andheld for theirown sakeratherthan as a means or instrumentsto an end. These points have alreadybeen discussed,but they are worthreiterating in an Islamicconte2rt as M lslimsstressthe valueof risksharing, and equityfinancinganangementscan makean important contribution to this goal. Unit trust holdingshave moreof the characteristics of financialinstrumentsthan the underlyingequities.They are less risky,their value being based on a basketof equities,and can alwaysbe sold backto the companywhichissues the units for cash. In Islamiccountrieswhereequitymarkets are underdeveloped, this can be a definite advantagefrom the perspectives of liquidityand security,as a financialinstitution such as a unit trust companyor a banlrissuingsuch paperwill be able to tradethe underlyingassets by swapsor othermeansbecauseof its sheer size, but the private investorcannotusuallytake such an approach withoutincurnngheavy transactions costs.In otherwords,the unit trustcan benefitfromeconomies of scale,whichreduce the dealingcosts in relationto the volumeand value of transactions. In many Muslim countriesthe commercialbanks have marketedunit trusts in recentyearsas a meansof extending the rangeoftheir financial productsanddevelop ing new lines of business.The strategy havebeento concentrate on egistingcustomers throughcross-selling ratherthan attracting new clients.In SaudiArabiamost of the leadingcommercial bankshave adopted this approach, whichhas beenespeciallysuccessfill in the case of the NationalCommercial Bank given its largecustomerbase. The aim has been to attractfundsfromcustomers who use theirlocalbankfor transactionsbalances,and to a lesserextentsavings,but who placedinvestmentfunds in overseasmarkets,usuallywith foreignbanks. The unit trustconcepthas also receivedsome attentionfiom the IslamicDevelop ment Bank in JP(128h which has exploredthe possibilityof offeringan Islamicunit trust.This could attractadditional capitalto the bankfrom the Islamiccommercial banksand other bodies,and extendits resourcebase. For the investorthe attraction would be the fact that a majorIslamicinstitutionis administering and offiering to guaranteethe trust.The degreeof riskis much less with units basedon a spreadof Islamicinvestmentsratherthan with individual investments.Such units would rep resentattractive long-term instruments whichIslamicinvestors couldholdwith a considerable degreeof confidence.

FUTURE XEVELOPMENTS
There are severallikelyways forward as far as Islaniicfinancialinstruments are concerned. One is obviously to make increaseduse of existing Islamic financial instruments, such as zero couponbonds,paperfor tradefinanceandunitisedsecunties.

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Thereis a needto encourage secondary market development so thatinstruments can be tradedeffectively. This will makeprimaryinstruments more attractiveas purchaserswillknowthattheycan alwaysobtaincashfor theirsecurities if theirliquidity positionnecessitates this.The aimin otherwordsmustbe to promote market breadth, but also to ensurethat thereis sufficient depthfor the market to functionproperly. Anotherobviousavenueforward is to furtherdevelopthe instruments themselves by lookingat whatis available in international markets, andassessing theirsuitability for the Islamicworld.In this case the innovation is in the application, but it may of coursealso be possibleto designwholly new instruments fiom existingIslamicfinancialproducts. It is possible,for example,to envisagea zero couponbond which could be convertedinto equitiesundercertainpredefined conditions.Islamicpreferencesharescould also be developed.Muslim owned quotedand perhapseven unquotedcompanies could presumably have "rightsissues",as a meansof raising freshcapital. Thoughthe wholesubjectof Islamicfinancialinstruments has only recentlybeen explored, it appears that thereare manySuitfill lineswhichareworthpursuing. The scopefor development of Islamicfinancialproducts is enormous. Furtherrnore, it is apparent thatsuchproducts canplaya major role,notonlyin facilitating development in Muslimcountries, but in promoting economicadvancemuchmorewidely

FURTHER READING

AhmedEl-Ashker, TheIslamicBusiness Enterpnse, CroomHelm,London,1987. GilbertBeauge,Les Capitaux de l'Islam,Pressesdu CNRS,Paris,1990. JulianFranks, John Boyd and WillardCharleton, Corporate Finance:Concepts and Applications, KentPublishing, Boston,1985. JohnGilbody,7theUK Monetary and Financial System,Routledge, London,1988. ZubairIqbaland AbbasMirakhor, IslamicBanking,IMF Occasional Paper,No. 49, Washington, 1987. KV Peasnelland CWR Ward,BritishFinancialMarketsand Institutions, Preniice Hall, New Jersey,1985. RodneyWilson(ed.)IslamicFinancial Markets, Routledge, London,1990.

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