Look out through any window and you will see all of creation. Everyone and everything is here for a purpose and we are all in this together. We are all sharing the risk of living on this planet together. One of the fundamental building blocks of Islamic Finance is Risk Sharing. What could be simpler than that? We are obliged, directed and encouraged to share risk with each other in order to grow and develop. The guidance we have is very clear. However, we have work to do in the execution.
In the field of finance, we have a regulatory system which is geared towards a system of Risk Transfer and on occasion, condones Risk Shifting. Until we start restructuring the Regulatory System for Finance to one that accepts the concept of Risk Sharing, we will be challenged as to how we are going to implement a system of Risk Sharing completely. Applied Research coming from INCEIF is starting to demonstrate the empirical evidence to support a system based on Risk Sharing. What will be required in the future is both more of this work and the energy and focus to articulate clearly the demonstration effect.
As a good friend of mine often says “We have 19th Century Institutions with a 20th Century mind-set tackling 21st Century problems!” That has to change and it must change fast for the betterment of all humanity.
As always, there is still much to do and not a moment to lose!
By Daud Vicary Abdullah