Page 18 - Valentino Cattelan - In the name of God: managing risk in Islamic finance

VALENTINO CATTELAN

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society: in this way, in the ‘fight’ between gods and men for ruling the
(un)expected, the former get their own back. On the Arab side, if Brunschvig
underlines how in classical Islamic thought «like any good and useful good, gold
(dhahab) and silver (fidda, wariq) have been created and given generously by God
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to the disposition of the human being» (and here, indirectly, rizq ﻕﺯﺭ reappears
again), much has still to be investigated on the conception of money and credit
relations (dayn) in Islamic finance. Metaphorically speaking, another voyage
through the Mediterranean is certainly needed.
Second, if an alternative conceptualization of risk characterizes Islamic
finance, as this article has tried to highlight, it seems to me that further
consideration should be given to this diverse, while still remarkable, story of risk
in financial regulation, too. In fact, while a plural financial system, where
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different conceptions of economic justice(s) co- exist and influence each other,
may still be distant, it cannot be denied that a level playing field, where
conventional and Islamic finance will be able to co-exist and prosper in the same
marketplace, will necessarily have to consider how parameters of capital
adequacy and governance for Islamic financial institutions should be adapted in
the light of their peculiar model of risk management, requiring amendments ad
hoc to international standards (e.g., Basel criteria). These adaptations, far from
certifying ‘god’s victory’ over the human story of risk, will foster a fair
competition in a marketplace where Islamic and conventional finance will
properly integrate one aside the other, under the same (God’s) sky.
In the end, if on the one side the remarkable story of risk leads our rationality
as well as imagination to deal with the (un)expected, between gods’ and men’s
power, and in this way «helps define what it means to be a human being» and
«how free we are to make choices», on the other side a comparative study of risk
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in financial theory may lead “to alternative perspectives on economic
development and social integration, nourishing […] an open society through the
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centrality of individual freedom”.
And this freedom to choose among alternative financial models may be what
the future story of risk will be about.

58 LE GOFF, La bourse et la vie. Economie et religion au Moyen Age, Paris, 1986, LE GOFF, Le Moyen
Age et l’argent. Essai d’anthropologie historique, Paris, 2010.
59 BRUNSCHVIG, Conceptions monétaires chez les juristes musulmans (VIII-XIII siècles), in
BRUNSCHVIG (ed.), Études d’islamologie, Vol. II, Paris, 1976, 273.
60 CATTELAN (ed.), Islamic finance in Europe: towards a plural financial system, Studies in Islamic
Finance, Accounting and Governance, Cheltenham, UK - Northampton, MA, USA, 2013.
61 BERNSTEIN, Against the gods: the remarkable story of risk, cit., 8.
62 CATTELAN, Towards a plural financial system, in CATTELAN (ed.), Islamic finance in Europe:
towards a plural financial system, cit., 232.

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