Islamic finance in Europe (36)

Continuation

1.4 THE MAIN FINANCIAL INSTRUMENTS

The Islamic finance industry has developed a wide range of financial products.

These financial products are Shari’ah-compliant.

To ensure that they meet this specification:

-      they make use of contracts acceptable under traditional Islamic legal doctrine;

-      and also adapt conventional financial contracts.

Thus, they comply with the tenets of the Shari’ah.

There are two main types of product:

-      profit and loss sharing instruments (PLS) and mark-up contracts;

-      financial certifi cates that are similar to bonds, which are known as “sukuk”.

From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)