Despite noticeable growth in Islamic banking and finance literature in recent years very few
published books in this area deal with supervisory and regulatory issues in Islamic banking -
theoretically or empirically - and none with the critical issue of risks involved in liquidity
management of Islamic banks. This unique book is the first of its kind in dealing with
challenges these financial institutions face in the absence of interest rate mechanism and
debt-based financial instruments. The book examines critically issues involve in managing the
risk of liquidity management for these types of institutions including those stemming from
Basel requirements. It then offers an alternative regulatory framework more appropriately
suited for such banks without compromising safety and security. The book's unique features and
innovative dimensions diagnostically differentiate between Islamic banks and conventional banks
as related to liquidity management risks. It proposes a risk-sharing regulatory framework that
once implemented would mitigate risks posed by balance-sheet mismatches. The book aims to
assist regulators supervisors Islamic finance practitioners academicians and other relevant
stakeholders.
