Derivatives, market risks and "Gharar": In search of an Islamic alternative

The currently prevailing position among Islamic Finance's jurists and theorists being to prohibit derivative products in Islamic Financial Institutions, the search for an Islamic alternative to these products, in particular for market risks' management, constitutes one of the fundamental axes of research concerning the future of this school and type of institutions. Thus, this doctoral work deals with the inference of the possible contemporary meanings of the Islamic concept called prohibited Gharar (litt. prohibited risk) while opposing it to the permissible risk-taking, then, based on the corresponding findings, it deals with the exploration and proposal of alternative instruments to derivatives. On the first aspect, this research used texts of Islamic Fiqh (jurisprudence), and mobilised qualitative and numerical tools of analysis, while drawing on Max Weber's method of the idealtype. On the second, it implemented a survey combining literature and field study, before passing the obtained instruments through a filter constructed from the results of the first aspect. This work has mainly contributed to shed a new light on the theories of risk-taking and Gharar in Islam, to identify and discuss the shadow areas behind contemporary debates, to draw up an inventory of research on alternatives, to identify and understand a phenomenon called replication trap, and especially, to propose a general way out, using the Islamic theory of need and public interest, the idea of risk-sharing and that of alternative.