bacasper
Joined: 26 Mar 2007
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 Posted: Fri Nov 20, 2009 8:46 am Post subject: Will Islamic banking save our economy? |
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Mises, you'll love this! Visitorq, how about it - no fractional reserve to create artificial money. Is there anything to it?
From another list:
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In the wake of gone or ongoing economic recession, the Islamic banking and finance system in particular was hailed as a potential savior. We heard about leading economists, governments and even the Vatican itself appreciating and acknowledging what this system has to offer: the elimination of Riba (interest/usury) , focus on contracts, asset-backed financing and trading etc etc... as a matter of fact, and a point to note, Islamic banking & takaful (i.e. Islamic insurance) is being hailed as an apt alternate to the conventional banking system in toto. AIG is selling Takaful products. The UK government is keen in establishing itself as the hub of Islamic Finance and is actively and proactively competing with the French government, the Hong Kong government and other governments in the world--why is this so? why is this sudden interest in Islamic Finance? What is more importantly intriguing is that this type of banking is supposed to be legally "advised" and "supervised" by a panel of Shariah Scholars comprising the Shariah Board.
Questions are:
1. Is there any difference between conventional banking system and Islamic banking system, both from micro and macro perspective?
2. Is Islamic Banking really a better alternative to conventional banking system? In what ways?
3. Fractional Reserve and the creation of artificial money through it is hailed as the chief ill in this banking system. Does Islamic Bank eliminate fractional reserve through its asset-backed lending?
4. Are we going to experience economic justice through this Islamic system of banking and insurance?
One thing I have to say on the behalf of Islamic Banking. The advocates of Islamic Banking themselves believe that the current system is not AT ALL in the true spirit of Islam and that until "Musharaka" is implemented, we might never get to eat the fruits of this system. So that is a point to remember before answering the above mentioned questions.
Looking forward to your point of views on Islamic Banking... |
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