The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Islamic Finance

  • Mahmoud El-Gamal
Reference work entry


Islamic laws on financial matters date back to medieval times. They were reinterpreted in the 20th century to provide guidelines for the burgeoning Islamic financial sector. Compliance with religious law is a driving force in this sector, and a variety of financial instruments have been developed that are adjudged to be acceptable for use by Muslims. These continue to evolve, and the rules could be considered to merit reinterpretation to better enable Islamic financial institutions to deal with risk factors and obey the spirit, rather than merely the letter, of medieval Islamic jurisprudence, which was regulatory in nature.


Islamic finance Sharia law Mudaraba 

JEL Classifications

Z12 G00 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Mahmoud El-Gamal
    • 1
  1. 1.