This is the third book of the series of Notes on Islamic Economics. It studies the Islamic finance and banking part of Islamic economics in eighteen chapters. chapter 1 foundation of islamic financechapter 2 principles of islamic financechapter 3 introduction to islamic finance contractschapter 4 overview of islamic finance contractschapter 5 characteristics of islamic financechapter 6 maqasid al shari'ah in the prohibition of ribachapter 7 islamic financial intermediationchapter 8 comparison of islamic finance with conventional financechapter 9 islamic banking and developmentchapter 10 success factors of islamic bankschapter 11 the rise of a power alliance of wealth and shari'ah scholarshipchapter 12strategic trends in islamic banking and financechapter 13 risk management in islamic bankingchapter 14innovation in liquidity management instrumentschapter 15sukuk: islamic alternative to bondschapter 16service sukuk for financing public utilitieschapter 17cooperative micro finance: an islamic approachchapter 18ethical values in conventional and islamic finance