global-journal-of-human-social-science-c-sociology-culture Global Journal of Human-Social Science - C: Sociology & Culture 0975-587X 2249-460X Global Journals Publishing Group Incorporated 74808 Islamic Finance: A Bulwark against Crisis? DerbelDr. Hatem DammakNeila ChkirAli FRANCE, University of West Paris Nanterre La Defense 15 03 2012 12 C11 101 113

The aim of this paper is to show that the Islamic finance is more stable than the conventional finance constituting, thus, a means to reduce the impact of financial crisis. Using a VAR model for the financial indexes of France (SBF250), United States (DOW JONES), United Kingdom (FTSE100), Indonesia (JAKISLM) and Saudi Arabia (TADAWUL) covering the period (26/02/2007-12/20/2010), we show that the effect of a shock on the American market during the period of crisis is negatively transmitted on all other markets, but with a small extent on the market using the method of Islamic financing.

 Islamic Finance Conventional Finance financial crisis VAR model. Full Text

The aim of this paper is to show that the Islamic finance is more stable than the conventional finance constituting, thus, a means to reduce the impact of financial crisis. Using a VAR model for the financial indexes of France (SBF250), United States (DOW JONES), United Kingdom (FTSE100), Indonesia (JAKISLM) and Saudi Arabia (TADAWUL) covering the period (26/02/2007- 12/20/2010), we show that the effect of a shock on the American market during the period of crisis is negatively transmitted on all other markets, but with a small extent on the market using the method of Islamic financing.