Islamic Finance For Dummies

Introduction

The years 2008 and 2009 weren’t exactly auspicious for many banks, brokerages, and other financial firms around the globe. (How’s that for an understatement?) In the United States, large financial institutions such as Lehman Brothers and Bear Stearns collapsed after getting entangled in the mortgage-backed securities market. Other large financial firms required government support to stay alive. The severity of the global financial crisis that followed has been described as second only to the Great Depression. Yet from 2008 to 2009, the assets of the 500 top Islamic financial institutions grew — from $639 billion to $820 billion.

For people like you and me, who earn a living (or plan to earn a living) within the financial sector, a statistic like that provokes questions. What sets apart the Islamic finance industry from the rest of the financial world? And how have its differences helped this sector thrive when the rest of the global financial market struggles to regain its balance?

I wrote this book because so many people like you — bankers, investment advisors, fund managers, and other financial professionals (or students with an eye on becoming the next generation of these professionals) — are hearing from their peers that Islamic financial products are the next big thing. But other than knowing that a market exists for products that adhere to the tenets of Islam, many financial industry students and professionals don’t know what the term “Islamic finance” really ...