What does a global financial market based on custodial relations look like? A critical appraisal of Islamic finance as a case study of social capitalism

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Please cite the paper as:
&lquo;Aaron Pitluck, (2012), What does a global financial market based on custodial relations look like? A critical appraisal of Islamic finance as a case study of social capitalism, World Economics Association (WEA) Conferences, No. 3 2012, Rethinking Financial Markets, 1st November to 31st December, 2012&rquo;

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Abstract

This paper argues that the existing market in Islamic finance closely resembles Westbrook’s (2012) vision of social capitalism based on custodial regulation. However it also argues that the social benefits of presently existing Islamic finance appears rather slight, in large part because three social forces push Islamic finance to closely resemble conventional finance. The paper therefore concludes that on one hand, the dangers of embarking on such a social capitalist project appear minimal, but on the other hand, the benefits are also likely to be minimal unless there is a regulatory project in place to counteract the three social forces this paper identifies.


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