Do Islamic financial institutions perform better than their Western counterparts during periods of financial stress? How do Islamic financial institutions manage risk, given their unique characteristics and the need for shari’ah compliance? Islamic Banking and Financial Crisis looks at the challenges for Islamic financial institutions in an international post-Basel II system where banks are required to have more capital and liquidity. It also examines the influence of governance on client and investor perceptions and their implications for institutional stability and sustainability. It concludes by suggesting how the Islamic financial industry can better fulfil both the legal and social requirements of shari’ah.