The Islamic Finance Handbook: A Practitioner's Guide to the Global Markets

Introduction^*

Daud Vicary Abdullah

President and Chief Executive Officer, INCEIF—The Global University of Islamic Finance

Mohd-Pisal Zainal

Director of Research and Publication, INCEIF—The Global University of Islamic Finance

The subprime crisis that peaked in 2008 has pushed the world economy into the deepest recession since the end of World War II. As doubts mount over the proper functioning of the conventional banking and finance industry during the crisis, growing attention is being given to Islamic banking and finance.

Headed by Iran, Saudi Arabia, and Malaysia, Islamic finance has penetrated more than 65 countries around the globe. By the end of 2013, Islamic financial assets were estimated to be around US$1.3 trillion to US$1.5 trillion. Although Islamic assets are roughly less than 1 percent of global financial assets, their rapid growth, especially in Southeast Asia and the Middle East, and their superior performance during the crisis have led many to believe that Islamic finance is a viable alternative. The rapid growth of the Islamic finance can be seen in various regions of the world. To provide perspective and an overview of the Islamic finance industry, key developments of the industry for various regions are highlighted in this introduction.

Southeast Asia

Southeast Asia can be considered one of the key centers of Islamic banking and finance, with Malaysia being a leader. In Malaysia, the formal development of Islamic finance began with the establishment of ...