Consolidating the Constraint of Islamic Financial Principles in the Development of Saudi Arabia’s Financial Market.

Abstract

The development of the Saudi financial market represents an institutional revival and re-adaptation of Islamic economic principles into modern capital market. Along a broad spectrum of culture and theology, the products and service that emerged from different levels of harmonisation, restructuring and consolidation of the Saudi capital market is a potential area that exposes and also consolidates the gaps that have historically divided Islamic financial system and financial systems of the western world.^[i] In comparative discourse, the development of Islamic financial systems like that of Saudi has been a model in the field of research that is driven by driven by legal pluralism, and the cross-fertilization of different legal traditions, both Western and non-Western.^[ii] Hence, it stands at the intersections of law and economics and of Religion and politics.^[iii] Within this grand framework, one witnesses an International financial regime that is evolving and often defined by the retracting of financial products and services that open the way to contain modern challenges and expand on the orthodox paradigm of law and economics of the Islamic communities.^[iv] This paper highlights the challenges and opportunities that are present in this territory of consolidation and expansion.

[i] Bianchi, R. R. (2006). Revolution in Islamic Finance. The Chicago Journal of International Law, 7, 569-580.

[ii] Dupret, B., Berger, M., and Al-Zwaini, L. (Eds.). (1999). Legal pluralism in the Arab world (Vol. 18). BRILL.

[iii] Bianchi, R. R. (2006). Revolution in Islamic Finance. The Chicago Journal of International Law, 7, 569-580.

[iv] Underdal, A., and Young, O. R. (Eds.). (2004). Regime consequences: methodological challenges and research strategies. Springer.