The last two decades witnessed fast growth of Islamic finance and introduction of several new products from sukuk to tawarruq and commodity murabahah. Professional bankers and shari’ah specialists have been breathlessly racing to invent new Islamic financial products to mimic or replace every single interest-based contract. Thanks to the big financial crisis of 2008 which allowed us to rethink the fundamentals of Islamic finance that made Islamic banks more resilient to the crash than conventional banks and to reconsider the unique characteristics of Islamic finance especially in the area of risks to which Islamic financial institutions are exposed to. 

This paper intends to study the risks to which Islamic finance products are exposed to especially those that are unique to the providers of these products and to make a few comments or propositions on risk management arrangements and tools in Islamic finance as may be derived from the shari’ah axioms and rulings, especially in relation to new products. It has two sections; section one which deals with the fundamentals of Islamic finance as became emphasized after the financial fall down of 2008 and section two will discuss the risk of Islamic financial institutions and their management.