Sale of Debt

In: Business and Management

Submitted By eihabjalal
Words 3800
Pages 16
Sale of Debt
Should We Trade in Debt?

Term Paper for the Islamic Financial Contracts Course
Dr. Monzer Kahf

Student: Ihab Abdelrashid Galal
Date : 13th May 2013

Content: 1- Introduction a. Definition of debts b. Is debt a real asset c. Does debt create value 2- Study d. Definition and process e. Advantages and disadvantages f. Trading debts and financial crisis g. Trading debts in the world h. Cases and applications: i. Sukuk ii. Options iii. Rescheduling of debt iv. Account receivable factoring 3- Conclusion 4- References

The recent financial crisis has proven that most of the economists and financial experts need to reconsider their views in relation to the proper financial system and also to the financial transactions. One of the major factors behind this crisis was the lack of realism in the capital market and financial transactions. However there were voices during and after the crisis claim such financial crisis would have been avoided, if asset-backed Islamic finance were adopted.
It is well known that sale of debts is one of the area that have been criticized by many Islamic financial supporter since years.
However, nobody can ignore that the debt market is a very important source of capital in the west. To feel the importance of the subject matter of this paper, let us look at some useful information from USA, as the Unites States’ debt market is one of the biggest debt markets on the earth;
The Bond Market Association estimates that five trillion dollars of corporate debt was…...

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