Revision in the jurisprudence of markets and financial engineering

Abstract

Financial markets, alongside with commercial banks, have been the most important financial intermediaries in different societies. Muslim communities must, by virtue of their faith, abide by Shari'a controls in their financial markets and in all their transactions. This paper reveals institutional shortcomings and a lack of social guardianship that caused a complete omission of the final results and effects while evaluating the activity of the financial markets. Moreover, the paper identified a clear trend towards formalism stamping the path of Islamic financial engineering in its effort looking for solutions and exits for transactions by resorting to the terms and promises. In the End, The paper concluded on many recommendations based on its main conclusions considering the state of the contemporary markets in light of the recent American financial crisis (2007-2008).