Displaying items by tag: Islamic Banking
Economic instability invariably causes hardship and moreover reduces the efficiency, in one way or another, with which resources are allocated. A significant degree of instability, as is widely believed, is caused by fluctuations in aggregate demand. However, much instability is also caused by interest-based financing. Economic instability commonly causes a range of inefficiencies, in one form or another............. Download the full article in pdf attachment (below)
The modern banking system is known as the “fractional reserve system.” The reason is that in this system, financial institutions are legally permitted to take a certain amount of risk with their depositors’ funds. This risk arises from lending the vast majority of deposits out at interest to various parties willing to borrow. The shareholders of financial institution earn interest income by making loans using depositors’ savings to borrowers at rates higher than those they pay to depositors............. Download the full article in pdf attachment (below)
Unemployment is a condition of idleness, whereby the unemployed person can find no work, and may thus become a burden on his family or society, or even turn to crime to survive. Contrary to a popular but misleading notion, there is no “natural” unemployment. All unemployment is unnatural, as it is hardly natural for a healthy human being capable of work to remain idle for any length of time............. Download the full article in pdf attachment (below)
“Finance” has both a theoretical and a practical meaning. In the theoretical sense, finance is the knowledge of acquiring and allocating (utilising) funds, public as well as private. In the practical sense, finance is the management (earning and spending) of funds to achieve specific objectives, personal or social............ Download the full article in pdf attachment (below)
increased scrutiny from those dissecting what went wrong. Who, after all, had trained the
perpetrators of the crisis? Were the “masters of the universe” ever taught about ethics?
And if not, why not?
Training in Islamic finance, which was already gaining in popularity pre-crisis, has grown
from strength to strength, as it has developed a reputation as a haven of common sense
and relative security in uncertain times........... Download the full article in pdf attachment (below)
Sukuk are Islamic certificates of investment. They signify co-ownership of productive resources, known as the “underlying assets.” Because income to sukukholders is generated by trading or real investment rather than mere lending, sukukholders earn profit rather than interest. As co-owners of productive assets, sukukholders face the risks of ownership. In particular, they face the risk that their assets may not generate profits or that may even incur losses. They also face the risk that the assets may be damaged or destroyed completely........... Download the full article in pdf attachment (below)
The world in general is in search of a better financial system that, among others, can ensure more stability, efficient allocation of resources, just distribution, responsibility of investors, risk sharing, sustainability, entrepreneurship and innovation.......... Download the full article in pdf attachment (below)