Radical uncertainty, non-predictability, antifragility and risk-sharing Islamic finance

Umar Rafi, Abbas Mirakhor, Hossein Askari

Abstract


Under conditions of radical uncertainty, risk sharing renders financial systems antifragile. The goal in this introductory paper is to show that risk-sharing Islamic finance shares the characteristics of an antifragile system by mapping some characteristics of antifragility onto those of risk-sharing Islamic finance. We compare the benefits of a risk-sharing financial system to those of the dominant risk-transfer/risk-shifting conventional system of finance, basing ourselves on the criteria of antifragility. We focus on the argument that the antifragility principle of “skin-in-the-game” is equivalent to risk-sharing Islamic finance requirement of “no gain without risk.”

Keywords: risk sharing, antifragility, skin-in-the-game, no gain without risk, Islamic finance

JEL codes: D81, D89, E44, F34, G32


Keywords


risk sharing, antifragility, skin-in-the-game, no gain without risk, Islamic finance

Full Text:

PDF


DOI: http://dx.doi.org/10.13133/2037-3643_69.279_3

Refbacks

  • There are currently no refbacks.


Copyright (c) 2017 Umar Rafi, Abbas Mirakhor, Hossein ASKARI Askari

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

 

 

Sponsored by   


ISSN 2037-3643


Reg. Tribunale di Roma n.377/2009 del 19/11/2009