Islamic Finance, Consumer Protection and Public Policy

Abstract

Islamic finance in its broadest sense has existed since the early years of Islam. While Islamic finance has much to offer with regard to financial management and ethical investing, it lacks cohesive and overarching regulatory structures. This chapter addresses these concerns by focusing on two central themes: (1) the importance of faith or religion for some people when it comes to financial decisions, and (2) the potential consumer protection concerns with respect to regulating what is or what is not “Islamic” in western financial markets. The chapter argues that Islamic finance, has much to offer to global finance, but its current practice falls far short of Islamic economic and ethical ideals.