Islamic Finance, Consumer Protection, and Financial Stability

May 18, 2015

Preview Citation

Format: Chicago

Inutu Lukonga. Islamic Finance, Consumer Protection, and Financial Stability, (USA: International Monetary Fund, 2015) accessed March 14, 2025

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.

Subject: Banking, Deposit insurance, Financial crises, Financial services, Islamic banking, Islamic finance, Legal support in revenue administration, Revenue administration

Keywords: Asset-backed Sukuk, Banking sector, Central bank, Consumer awareness, Consumer Protection, Consumer vulnerability, Deposit insurance, Financial Stability, Global, Investor confidence, Investor protection, Investor right, Islamic banking, Islamic Finance, Legal support in revenue administration, Liquidation process Sukuk, Protection of Sukuk investor, Shar'iah principle, Shari'ah-complaint Sukuk, Sukuk holder, WP

Publication Details

Pages:

39
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/107
Stock No:

WPIEA2015107
ISBN:

9781513515106
ISSN:

1018-5941

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