Risk Capital Investment and Economics Cooperation
Presented to the Baden-Baden Symposium, 6-8 May, 1981. In the German economy the supply of risk capital has declined over the years. The corporations, on the other hand, are in need of growing amounts of risk capital. The obvious and most direct method is to increase equity capital. Islamic banks seem to be the most ideally suited source of equity-finance. Therefore, it would be highly desirable for Islamic banks to enter the capital market. Any barriers in the market for equity capital may be removed. Any market inefficiencies thus created may be accepted for distributive reasons. The discussion entails using a model and abstracting from a real-life situation. A valuable paper. For economists. Documented.