Benchmarking Islamic Finance
A Framework for Evaluating Financial Products and Services
Pricing or benchmarking is a process of evaluating the performance of a financial company’s products and services or systems, against other businesses, considered to be at the top of their field, by applying a measurement of “best in performance.”
This book includes contributions from the leading global experts in the field who tackle topics such as whether the Islamic financial system has been dependent on the LIBOR / EURIBOR in its benchmarking exercises to date, and thus, whether it will be affected negatively by the predicted non-existence of the LIBOR / EURIBOR from 2021 onwards. They also address the question of whether the Islamic financial system requires benchmarking of its products and services and consider the emergence of Sharī ͑ah-justified benchmarking in today’s Islamic financial system. Additionally, they look at how benchmarking formulas should be adapted to ensure the satisfaction of customers within the principles of Maqasid al-Sharī ͑ah.
It takes a legal and institutional approach to the subject, which readers will find particularly valuable, as there are various forms of Islamic finance institutions that do not conform to established models in the finance industry. Furthermore, there are emerging business models that will benefit from this line of investigation.
This book offers a timely analysis of these issues and redresses the existing misconceptions and misinterpretations pertaining to benchmarking, in an Islamic finance context, and, as such, provides guidance and strategies for future directions. It will appeal to researchers of Islamic banking, finance, and insurance, as well as, practitioners, particularly standard setting bodies, regulators, and policy makers.
Table of Contents
Introduction Part I Goodbye to LIBOR? Emergence of Benchmarking in Islamic Financial System 1. Does Islamic Finance Need Benchmarking? 2. Why Does Islamic Finance Require Benchmarking? 3. Goodbye to LIBOR: An Alternative Islamic Interbank Benchmarking Mechanism 4. Islamic Finance, Benchmarking and LIBOR Transition: Impacts and Implications 5. SWOT Analysis of Benchmarking in the Islamic Finance Industry Part II Shari’ah Analysis of Benchmarking Islamic Finance 6. How is the Qur ͗ānic Solution to Benchmarking Financial System? 7. How Does Sunnah Recognize Benchmarking Formula for the Islamic Financial System? 8. Shari’ah Analysis of Benchmarking in the Islamic Financial System 9. Fiqh Analysis of Benchmarking in the Islamic Financial Products and Services 10. Analyzing Fatwa on Benchmarking Islamic Financial Products and Services 11. Fatwa Analysis of Benchmarking in Islamic Financial System 12. Analyzing Traditional Benchmarking Experiences from Maqasid al-Shari’ah Perspective Part III Benchmarking Islamic Finance: its Law and Compliance 13. Legal and Compliance Reform for Islamic Financial Benchmarking 14. Implications of the Regulatory Shift from LIBOR to SONIA Benchmark for the Islamic Banking Industry in UK Part IV Testing and Experiences in Benchmarking Islamic Finance 15. How Does Benchmarking Matter in Islamic Microfinance? 16. What Benchmarking Formula in Islamic SME Financing May be? 17. Foreign Currency and Rate Derivatives on Firm Value: A Shari’ah Experience
Mohd Ma’Sum Billah is a Senior Professor of Finance at the Islamic Economics Institute, King Abdul Aziz University, Jeddah, Kingdom of Saudi Arabia.