Synopsis
Nine hundred years ago Imam Al-Ghazali already insisted that riba (interest) be prohibited because it prevents people from undertaking real economic activities. This happens when somebody with money is allowed to earn more on the basis of interest. Western banks lend excessively to augment their profits. They are assured of the repayment of their deposits with interest. The easy availability of credit and the resultant steep rise in debt are the result of inadequate market discipline in the western financial markets due to the absence of risk sharing. The prevailing financial crisis, which started in 2007, caused Western interest-based banks to have to be bailed out of three to four trillion dollars by the US, UK and Europe. The financial crisis has seized up money markets and has led to a precipitous decline in property and stock value and a rise in bank failures. This created an uneasy feeling that there is something basically wrong with the Western interest-bearing banking system. As the economic crisis unfolded, it became evident that the international financial architecture is in need of reform. The global financial crisis has provided a valuable opportunity for Islamic finance and banking to demonstrate the usefulness of its chief characteristic – risk sharing. Under risk sharing, especially profit and loss sharing, the assets and liabilities of Islamic banks are integrated in the sense that borrowers share profits and losses with the banks, which, in turn, share profits and losses with depositors. On these grounds, investors are given a greater incentive to exercise tight oversight over bank management, since they share risks. From the standpoint of financial stability, Islamic interest-free financing does not change the level of uncertainty. It only redistributes the consequences of uncertainty over all parties to a business. Debt-financing of Western interest-based banks, in contrast, relieves the financier from uncertainty by shifting it onto the real investor (equity holder), who then also bears the entire risk of the enterprise. By spreading the same risk over more heads, the Islamic system then promotes stability. The Islamic interest-free system can therefore contribute appreciably to economic stability. It appears that the Islamic system does have merit and deserves more serious attention from academics and policy-makers alike, especially in view of the recent crisis and rampant bank failures in contemporary economics.
Les informations fournies dans la section « Synopsis » peuvent faire référence à une autre édition de ce titre.
Résultats de recherche pour Lessons That Need To Be Learned From Global Financial...
Image d'archives
Lessons That Need To Be Learned From Global Financial Crises
Vendeur : Revaluation Books, Exeter, Royaume-Uni
Évaluation du vendeur 5 sur 5 étoiles
Paperback. Etat : Brand New. 166 pages. 9.13x5.98x0.38 inches. In Stock. N° de réf. du vendeur zk062065502X
Acheter neuf
EUR 18,53
Expédition à EUR 14,45
Expédition depuis Royaume-Uni vers Etats-Unis
Expédition depuis Royaume-Uni vers Etats-Unis
Quantité disponible : 1 disponible(s)