Abstract
Risks have always been perceived as harmful and something that need to be avoided. Over time the concept of risk has evolved and progressed from one of resignation to fate to one of assessing, managing, and mastering risk. Prudent risk management is normally adopted to avoid financial distress that could lead to a full-blown financial crisis. One way of managing risk is to share the risk with others. Sharing of risk is one of the ways of mitigating uncertainties and is the foundation of Islamic finance. To ensure the collective well-being of the society, the government needs to assume the role of risk manager in the design and implementation of incentive structures that encourage coordination and cooperation in the market to achieve a desired economic goal.
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Othman, A., Mat Sari, N., Alhabshi, S., Mirakhor, A. (2017). Risk Transfer, Risk Sharing, and Islamic Finance. In: Macroeconomic Policy and Islamic Finance in Malaysia. Financial Institutions, Reforms, and Policies in Muslim Countries. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-53159-9_2
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DOI: https://doi.org/10.1057/978-1-137-53159-9_2
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