Financialised ethics, economic security and the promise of Islamic finance

Abstract

The character and state of a financial system are important contributing factors to the performance, stability and security of any economy, something which has been repeatedly demonstrated during times of financial crisis. While assessments of earlier financial crises tended to focus on shortcomings in the governance of financial sectors, not least when crises occurred in the developing world, many have noted issues with the moral character of the industry, and the attendant processes of securitisation and financialisation, in the wake of the transatlantic financial crisis of 2007–2008. Against these recent criticisms, Islamic finance was pitched as a more ethical, stable and secure alternative. Although the ideas that inform the development of Islamic finance might hold the promise of a more ethical alternative to conventional finance, the industry itself has not been immune to processes of financialisation and securitisation, which have arguably undermined the market's initial promise.