Includes bibliographical references (p. 305-318) and index.

What Is Islamic Banking and Finance? -- The Origins of Islamic Finance -- Growth in Islamic Financing Activity -- Financial Intermediaries -- Current Bank Products -- The Impact of Religious Scholars -- Government Influence -- The Potential of Islamic Banking and Finance -- Islamic Finance as the Application of Islamic Law -- Religious Law (Shari'a and Fiqh) -- Relevance of the Religious Law to Banking and Finance -- Obstacles to the Application of the Islamic Law -- Islamic Law and Islamic Economics -- Structure and Method of Classical Law in Theory and Practice -- Ijtihad, or Derivation from Revealed Sources -- Shari'a and Fiqh; Divergence of Opinion; Schools of Law -- Four Methods of Elaborating the Law: Interpretation, Choice, Necessity, and Artifice -- Ethical and Legal Consequences of Islamic Legal Rulings -- The Casuistic Style of Classical Islamic Legal Reasoning -- Modern Reinterpretations -- The Context for Islamic Legal Developments in Islamic Banking and Finance -- Modern Islamic Legal Institutions -- Islamic Legal Application in a Western Legal Environment -- Qur'an and Sunna on Contract and Commerce -- Property or Wealth -- Trade by Mutual Consent -- Debt -- Usury -- Gambling and Risk -- Commercial Ethics -- Fulfilling Contracts -- Freedom of Contract -- Islamic Laws of Usury, Risk, and Property -- Law of Usury (Riba) -- The Qur'an; Riba al-Jahiliyya -- The Sunna -- The Sunna on Riba in Sales -- The Sunna on Riba in Loans -- Plumbing the Rules of Riba -- Gambling (Maysir) and Risk (Gharar) -- The Spectrum of Risks and Their Prohibitions -- Classical Fiqh Rules on Gharar -- Fiqh Provisions on Property (Mal) -- Islamic Law of Contract -- Freedom of Contract -- New Contracts -- Stipulations -- The Nominate Contract Scheme -- Mutually Onerous Contracts -- Gratuitous Contracts -- Accessory Contracts -- Four Principles of Islamic Contract Law Important in Modern Financial Practice -- Non-Binding (Ja'iz) versus Binding (Lazim) -- Risk of Loss (Daman) versus Trust (Amana) -- Rules Governing Delay in Payment and in Performance--The Sale of Dayn for Dayn -- The Promise (Wa'd) in Islamic Law -- The Law of Islamic Financial Institutions and Instruments -- The Model for an Islamic Financial Institution -- The Two-Tier Mudaraba -- Islamic Legal Hurdles Facing This Islamic Banking Model -- Islamic Contracts As Used in Islamic Finance -- Mudaraba -- Bay' Mu'ajjal, or Credit Sale -- Murabaha, or Sale with Markup -- Ijara, or Lease -- Salam, or Advance Purchase -- Istisna', or Commissioned Manufacture -- Ji'ala, or Reward -- Ta'min, or Insurance -- The Problem of Insurance and the (Tentative) Solution -- Possible Impact of Insurance on Islamic Financial Theory and Practice -- Prospects for Islamically Valid Derivatives -- Khiyar al-Shart, or Stipulated Option -- 'Arbun, or Down Payment -- Prospects for Approval of the Option as a New Contract Type -- Investment Securities and Their Negotiability -- Primary Market Instruments Islamically Lawful -- Primary Market Instruments Islamically Unlawful or Questionable -- Secondary Market -- Islamic Financial Instruments: A Primer -- Financing Working Capital -- The Murabaha Contract -- The 'Ina Contract -- The Salam Contract -- The Istisna' Contract -- Financing Receivables -- Long-Term Financing -- Leasing (Ijara) -- Revenue Bonds -- Equity-Like Instruments -- The Mudaraba Contract -- The Musharaka Contract -- Preferred Stock -- Attitudes Toward Risk -- Illiquidity Risk -- Credit Risk -- Currency Risk -- Capital Structure Risk -- The Opportunity Rate of Capital and Islamic Capital Structure -- Interest and Usury -- The Islamic Cost of Capital -- The Cost of Equity -- Capital Asset Pricing Model -- Arbitrage Pricing Theory -- Equilibrium Analysis of a Profit-Sharing Agreement -- Cost of Equity Summarized -- The Cost of Debt -- Murabaha -- Salam -- Istisna' -- Ijara -- Calculating the Weighted Cost of Capital -- Choosing an Appropriate Capital Structure -- Derivatives in Islamic Finance -- Relevant Islamic Contracts -- Islamic Contracts and Western Financial Products -- Forward Contracts -- Futures Contracts -- Call Options -- Put Options -- The Khiyar al-Shart Option -- The Mudarib Call -- Innovation in Islamic Financial Products -- The Intended Beneficiaries of Innovation -- Capital Users -- Capital Providers -- Proposals Related to Murabaha (Sale with Markup) -- Ownership-in-Transit -- Cooperative Non-Bank Factoring Firm -- Proposals Related to Salam -- Parallel Salam Contracts -- The Default Penalty Option -- An Islamic Clearinghouse -- Proposals for Innovations Related to Ijara (Lease and Hire) -- Lease Pools -- Staged Leases and Lease Pools -- An Islamic Convertible Lease -- Proposals for Innovations Related to Istisna' -- Back-to-Back Istisna' Contracts -- Options in Istisna' Contracts -- Istisna' Contracts for Manufacturing Streams -- Fungible Manufactures and Options -- Ji'ala (Reward).