A Critical Appraisal of Theory of Islamic Financial Regulation

Abstract

This critical narrative appraises the Islamic Theory of Financial Regulation by dissertating the elements thereof. It reviews different aspects of regulation and compares them with the objectives of financial market regulation. These elements of regulation surround constructs such as liquidity authority, market failure, monitoring and evaluation, asset safety and market imperfection. Furthermore, a discussion on objectives of financial market regulation towards outreach of benefits derived out of public and private utilities, preservation and maintenance of social values, promotion of Islamic moral values in the market, preservation and enhancement of socio-economic stability, promotion and support of public and private sector is done by keeping in view the elements of Islamic financial regulation theory. A conclusion is drawn at the end with a way forward in this area of research. Keywords: Islamic Theory of Regulation, Central Banking, Financial Market Regulation.