Islamic bonds in financial crisis

Segaf, Segaf ORCID: https://orcid.org/0000-0003-0017-1021 (2012) Islamic bonds in financial crisis. Iqtishoduna: Jurnal Ekonomi dan Bisnis Islam, 8 (2). ISSN 1829-524X

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Abstract

The financial crisis in 2008 is widely viewed as the most serious since the Great Depression. Facing a severe market reaction to the failure of AIG and Lehman Brothers, the US treasury Department put forward a bold and massive program of spending up to $700 billion on purchasing “troubled assets’ from financial institutions. The financial institutions need a finance product that which could decrease the risk borne by financial crisis. The Sukuk (Islamic Bonds) products are asset-backed, stable income, tradable and Syariah compatible trust certificates. Having Sukuk in the portfolio diversifies the holdings which
could decrease the risk borne by the financial institutions.
The first finding of this research, since Islamic bonds are more stable than conventional bonds and are less affected by the crisis hence many countries (whether Moslem or non
Moslem countries) start to prepare to use Islamic bond system. The second finding is Malaysia become the largest Sukuk issuer by three reason, first is The Malaysian government fully support for Islamic financial system, especially for Sukuk, second is Sukuk in Malaysia
have high rating provided by RAM ratings’ so both Muslim and non Muslim investors would like to invest in this market and third is Malaysia has a good relationship with Islamic
Investor (which prefer to choose Islamic bonds)

Item Type:	Journal Article
Keywords:	Islamic bonds; Crisis; Finance; Malaysia
Subjects:	14 ECONOMICS > 1402 Applied Economics > 140210 International Economics and International Finance 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150201 Finance 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150299 Banking, Finance and Investment not elsewhere classified 14 ECONOMICS > 1402 Applied Economics 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Segaf Segaf
Date Deposited:	24 Jan 2024 15:16

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