musharakah to provide housing finance, sukuk and its variants along with musharakah term finance certificates ( mtfcs ) which is a form of sukuk. mtfcs have greater appeal since these are issued against the strength of issuer ’ s balance sheet rather than specific assets of the corporate and are close to pls framework. ( iii ) hybrid islamic products. supported by advancements in islamic securitization, there has been acceptance of islamic investment certificates, i. e. sukuk bonds that are shariah compliant and tradable asset backed securities. industry has floated different types of sukuk with aaoifi recognizing about 14 different types of sukuks. most sukuks are sponsored by sovereigns, both in domestic and international markets, backed by approved government assets. although ijara ( asset based ) sukuk 2 are the most popular, other hybrid - sukuk ’ s backed by synthetic loans, salelease backs or head - lease / sublease ijarah and profit sharing structure are now emerging to be quite popular. underlying pool of assets for some sukuk comprise of istisna ’ and murabahah receivables as well as ijarah. 3 another example is the convertible sukuk – whether pure ijara or hybrid it can have an embedded option allowing them to be converted into another asset form depending on specified conditions. ( iv ) islamic mortgages. these are fast gaining ground and are being structured as : ( a ) the ijarah ( lease ) contract along the lines of conventional mortgage ; ( ii ) equity partnership ( diminishing musharakah ), where the mortgagee ( lender ) and mortgagor ( borrower ) jointly share ownership, which over a period of time is transferred to the mortgagor, who buys shares in interest of ownership by contributing each month toward buying out the mortgagee ’ s share in the property and return to the lender is generated out of the fair rental value of the property ; ( iii ) murabahah ( sales transaction ), is practiced in the united kingdom, where the property transfer tax ( stamp duty ) discriminates against the ijarah – or musharakahh - based mortgage ; and ( iv ) cooperative societies, where members buy equity ( musharakahh ) membership and help each other to purchase property from the pool of the society ’ s

economy that has suffered the greatest systemic strains from problems in the financial sector in the past fifteen years is that of japan, which remained tied to the commercial bank model raghu finds safest. the macroeconomic effects of new - style crises involving market liquidity, as in 1998, or outsized movements in asset prices may be more readily cushioned by monetary policies aimed at bolstering the general level of liquidity and reducing interest rates. such policies also carry less risk of increasing moral hazard. although investment managers receive substantial funds directly from households, many of their counterparties are sophisticated investors in positions of fiduciary responsibility. in addition, most asset managers are employees of institutions - mutual fund families, bank holding companies - that are in the market for the long haul. it is not in their interest to reach for short - run gains at the expense of longer - term risk, to disguise the degree of risk they are taking for their customers, or otherwise to endanger their reputations. i would expect these counterparties and employers to enforce compensation schemes that foster their objectives. as a consequence, i did not find convincing the discussion of market failure that would require government intervention in compensation. moreover, compensation regulation is likely to be easily evaded and fraught with risks of untoward consequences. one only has to recall the congressional action of 1993 that, by imposing lessfavorable tax treatment on some forms of executive compensation, fostered the shift to stock options that in turn was thought to have contributed to some of the transparency and corporate governance problems of the late 1990s. regulatory and supervisory systems do need to evolve to reflect the shift to market - based transactions. as intermediation shifts from depositories, with their specialized knowledge of borrowers, to markets, disclosure and transparency become more important to allow diverse private parties to assess risk properly, exert appropriate discipline, and contribute to the efficient allocation of resources. greater reliance on markets also elevates the importance of the safety of clearing and settlement systems. private - sector participants have every incentive to demand these disclosures and to ensure that their trades go through as contracted. but government may need to act in concert with private parties to arrive at collective decisions that strengthen markets and reduce systemic risk but might not be in the interest of individuals acting separately. and with more of the fluctuations in asset prices passing through to a large number and wide variety of households, educating people to make informed choices and protecting retail customers from abusive practices remain key governmental functions. a