Islamic finance in Europe (129)

Continuation

Hence the need for Islamic banks to pay close attention to interest rate risks.

Through various financing:

-      mechanisms

-      and instruments

the balance sheets of Islamic banks hold both financial assets as well as:

-      tangible

-      and intangible

non-financial assets.

Therefore, it becomes necessary to consider the risk of inflation, both in terms of the risk:

-      to the balance sheets of Islamic banks

-      and to the mechanisms by which Islamic transactions are priced.

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)