Investment Risk in Islamic Banking

Chapter 10 discusses investment risk in an Islamic bank. This chapter covers syirkah as a distinct characteristic of Islamic banks, the basic concept of investment risk, the forms of investment risk and its mitigation, as well as covering several issues related to investment risk in an Islamic bank, such as the basis of determining profit‐sharing ratios, the policy of profit equalization reserve (PER), investment risk reserve (IRR), and IR support in reducing fraud and moral hazard in a profit‐loss sharing‐based contract.