This volume includes some of the papers presented at the Fourth International Conference on Islamic Economic and Banking held at Loughborough University, UK, during August 13 – 15, 2000. The theme of the conference is ‘Islamic Finance: Challenges and Opportunities in the 21st Century’. Several papers were presented at the conference dealt with profit sharing as an alternative way of providing finance that can be used by financial intermediaries. Papers in the volume highlight some key features of the sharing based contracts as compared to the debt based contracts and how they can help improve efficiency and stability of a financial system.