FIRST INTERNATIONAL COLLOQUIUM ON ISLAMIC BANKING AND ISLAMIC FINANCE
Conference Proceeding is Downloadable here مجموعه مقالات اولین گردهمایی بین المللی بانکداری و تامین مالی اسلامی" قواعد ایجابی و سلبی تامین مالی اسلامی"
Conference Venue: Tehran
Call for papers
Papers in the following broader thematic areas are encouraged to be submitted. Papers should be original work,not published or submitted elsewhere,written in English.
A. Fundamental Concepts and the Pillars of Islamic Finance in a holistic perspective
A-1. Is there such a thing as IB/IF? Is Riba (usury) necessary for an economic system to survive? What assumptions need to be satisfied?
Guidelines: (1) The question here leads us to ask whether we have all the requirements to establish an IB/IF and run it successfully,(2) Some writers have cast doubts whether such a system exists or is it the imagination of ‘Muslims’,(3) It has appeared extremely hard for some conventional economists to imagine an economic system to work in the absence of Riba (interest). (4) Islam prohibits Riba in any form but endorses profit which is the return to actual capital directly engaged in risky investment(s); Risk being interwoven with actual investment. (5) What are the mechanisms,in the absence of Riba,to relate money (potential capital) with the real sector? How efficiencies of these mechanisms,in their totalities,compare with the conventional system?
A-2. What are the essential attributes of IB/IF?
Guidelines: (1) Attention has to be focused on how the mechanisms of IB/IF work. (2) IB/IF eliminates money intermediaries from the economic system. (3) Unlike the conventional system no authority is assigned to manipulate the market because the ‘outcomes’ come (endogenously) from within the real sector of the system. (4) Outcomes,long-run economic consequences,for that matter,can be viewed from standpoints like: (in) stability of general price level,(un)employment,(in)equitable distribution of income and wealth,social welfare,sustained economic growth,cycles,etc.
A-3. Principles of IB/IF
Guidelines: (1) Strict prohibition of Riba (interest) leaves no place in IB/IF in any form,simple or compound,such as interest-based loans and money market,(2) in such loans any risk involved is transferred from the lender to the borrower,(3) as soon as interest is allowed to penetrate in the system there is highly likely that ‘loans’ find ways to go anywhere except investment in order to earn higher ‘return’,(4) in IB/IF where PLS is the benchmark not only profit and loss are shared between the financier and the ‘financee’(user of finance) but also risk is shared between them in the pre-determined contract.
A-4. Pillars of IB/IF as an integral part of Islamic Economics
Guidelines: (1) Justice,cooperation and social welfare are considered as three pillars of Islamic economics; justice being the ultimate goal. (2) The pillars should play their coordinated and simultaneous active roles. (3) Efficiency-equity conflict in the conventional economic system is removed as long as Islamic verdicts based on Divine Rules are effectively incorporated in the model. This outcome should be obvious because Divine Rules come from outside this world aiming at maintaining love,empathy,altruism,sacrifice,mutual concern,forgiveness,gratitude,virtue,benevolence,and honesty between and among human beings,in general,and Muslims,in particular. (4) It will be hard to imagine that in such an environment efficiency is lost.
A-5. How IB/IF compares with the conventional system?
Guidelines: (1) Comparison can be made from different angles such as: philosophical foundations,principles,instruments,transmission mechanism(s),and economic consequences. (2) Qard-ul-Hasan (a mutual concern instrument) playing important role versus interest-based loans as mutual unconcern,risk-sharing and risk transfer. (3) Segmented markets in capitalism versus integrated markets in IB/IF. (4) Similarities and dissimilarities between conventional system and IB/IF. (5) The impact of profit,in PLS,versus interest (Riba)-based loans on long-run macro-economic consequences. (6) How Islamic Banking deals with surplus branches versus deficit branches? Does it allow ‘money market’ to emerge? Why and how?
A-6. Non-usury banking and the Abrahamic religions
Guidelines: (1) The concept of usury in the Abrahamic religions,(2) prohibition of usury in the Abrahamic religions,(3) alternative ways to avoid usury in the Abrahamic religions,(4) Non-usury banking experience among the followers of the Abrahamic religions,(5) the feasibility of implementing of Islamic banking in non-Islamic countries.
B. A prelude to Modeling a globally viable IB/IF system
B-1. Weighing different Islamic modes of contracts and their roles in economic system
Guidelines: (1) Comparing ‘exchange’ contracts with PLS contracts and the variable that brings their markets in equilibrium. (2) Opportunity cost of capital versus opportunity cost of money in both types of contracts,if any. (3) Time value of money versus money value of time in both types of contracts. (4) The effect of these contracts on cost of production,on pricing,and on social welfare.
B-2. Is there a unique model of IB/IF? What criterion should it possess to make it unique? What role Fatwas and economic considerations play here?
Guidelines: (1) We can have,unquestionably,as many Islamic finance models as there are ‘fatwas’ from religious scholars. (2) There would be few,but just one,model that passes the ‘economic test’ in achieving the long-run economic goals of IB/IF most efficiently.
C. Regulation and Regulatory Dimensions of IB/IF
C-1. The relevance of capital adequacy and inadequacy in IB/IF
Guidelines: (1) Concentration on Islamic banks’ balance sheets is a guide to find answer for the rules of Basels I,II,and III. (2) It should be made clear that when such banks are to be the advocates of depositors and the partners of investors,as they should,their balance sheets will dramatically be different from those in the conventional setting. The difference mainly lies on how tier 1 and tier 2 capital will be affected. (3) Basel accords should be examined whether they affect Islamic Financial Institutions (IFI) and in what ways?
C-2. How Basel I,II,and III affect IB/IF? Do they really change the performance of IF/IF? How?
Guidelines: (1) Examination has to be made on whether the safeguards issued by Basels are equally applicable in interest-based banking system as well as in IB/IF? (2) The conventional system has frequently proven to be vulnerable and causing financial disaster which may be used to prove internal inconsistency of the system. Basel accords are aimed,as much as possible,at preventing financial turmoil to occur. Avoidance of the Domino effect to occur again is the only purpose of the Basels. Stress test used in conventional banks is a proof for this claim. (3) Is there any evidence that PLS in IB/IF,in its totality,is as vulnerable as the conventional system? (4) Do we have,or can make,any safeguards in IB/IF independent of those for the conventional system?
D. Legal dispute resolution of IB/IF issues with special emphasis on the experiences of Muslim and Non-Muslim countries
D-1. Legal and ethical aspects of IB/IF
Guidelines: The important issue here is to check and see whether Islamic economic system encompasses the necessary properties of a justifiable economic system such as: (1-a) property ownership and relations,(1-b) kinds of economic freedom,(1-c) The character of incentive system,(1-d) The character of the coordinating or resource allocation mechanism,and (1-e) Locus and system of decision-making,2- The relevance,place and importance of ethical aspects of IB/IF derived directly from Qur’an and Sunnah which are absent in capitalism but make Islamic Finance more effective. 3- How ethics bind ‘people’,Muslims and non-Muslims,together and how the synergy derived from such bindings can effectively be used in IB/IF? 4- How people weigh ethical norms in economic spheres and how society and Islamic state can uphold them and in what applicable ways?
D-2. The role of Shariah compliancy and economic considerations in selecting and promoting new Islamic products
Guidelines: There are five imaginable different combinations of the two-tier players that is,Sharih fatwas and long-run macroeconomic consequences. However,all seemingly Shariah-compliant deceptive devices as the fifth combination are strictly ruled out but only two of the remaining four states endorse the applicability of the proposed product. Thus any new product has to possess the attributes of these two states.
E. Experiences of Islamic and non-Islamic countries in implementing IB/IF
E-1. Critical evaluation of IB/IF experiences in these countries with special reference to PLS Contract
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