Research from Shahid Beheshti University Broadens Understanding of Finance (Credit Default Swap: A Scrutiny of Differentiating its Nature from Credit Insurance and Sharia Feasibility Review): Finance

NewsRx Policy and Law Daily

2022 MAY 24 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx Policy and Law Daily -- New study results on finance have been published. According to news reporting out of Tehran, Iran, by NewsRx editors, research stated, “Credit risk as a possibility of a debtor’s default in its obligations has led creditors to acquire some tools to cover it.”

Our news correspondents obtained a quote from the research from Shahid Beheshti University: “Credit default swap as a derivative is one of the most effective risk management tools, because in addition to risk management, it provides an opportunity for the spread of secondary markets and the deepening of the capital market. Credit insurance is another type of credit risk management tool that is often confused with default swaps. Finding some homologies between credit insurance and credit default swap geos back to our legal and jurisprudential system as well as the Western law. Due to the acceptance of insurance in Islamic jurisprudence, these similarities have been used to justify credit default swap contract. In this research, an attempt has been made to draw a border between these two institutions.”

According to the news reporters, the research concluded: “It should be noted that recognizing the nature of credit default swaps will affect the assessment of the validity of such a contract from a jurisprudential point of view, and this discussion is crucial as it shows the possibility of accepting credit default swaps in the Iranian capital market.”

For more information on this research see: Credit Default Swap: A Scrutiny of Differentiating its Nature from Credit Insurance and Sharia Feasibility Review. thqyqat maly aslamy (pywsth), 2021,10(2):573-602. The publisher for thqyqat maly aslamy (pywsth) is Imam Sadiq University.

A free version of this journal article is available at https://doi.org/10.30497/ifr.2021.241342.1646.

Our news editors report that more information may be obtained by contacting Diba Jafari, Ph.D. Student, Department of Private Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran. Additional authors for this research include Mansour Amini.