Islamic Finance: big interest, no interest – A comparison with traditional finance
Islamic Finance attracts more and more interest each day. The meaning of the word “interest” here is obviously related to the appeal it has among people, due to difficulty in applying interests in Islamic Finance, this time in the financial acceptation of the term. I would say thank you to The Economist for the brilliant word game and recommend you, my dear reader, to give a look at their article later, too.
Now it is time to continue discovering something more about Islamic Finance, by mean of a paper I wrote as assignment for a course in Postgraduate Degree “Economics and Finance“, where I explained its main traits.
What is Islamic Finance?
Islamic Finance represents the whole complex of institutions, financial instruments, enterprises, which are compliant to traditions and claims of Islamic law: its name is Shari’ah and it contains religious and moral laws, rituals but also fiscal, penal, processual and private law. A Muslim must follow these rules in economic and financial aspects of life, too.
Islamic Finance in 1963 has started a process of development mainly in countries in middle-east area of the world. In the last years, Western community shows a growing interest for Islamic world, because of economic, political and religious reasons. These 3 reasons are interdependent: every moment of private and social life has to be respectful of Shari’ah.
A solid relationship exists among transparency, social responsibility and light speculation; there is a strong connection with real economy, since every financial operation is admitted only if its underlyings are real; banks participate in profits and losses of businesses they finance, there is a complete sharing of businesses’ risks.
What you read is a brief part of the introduction, just to taste the topic, while the following is the paper’s index, so you can grasp a brighter idea about research I did.
Table of contents:
- Islamic Finance:
- What is Islamic Finance?
- How has it developed?
- Which ways is it practiced nowadays?
- Islamic Finance in Europe
- Development in England
- Scenario in Italy
- Main features of Islamic Finance: how do they compare with traditional finance?
- Institutions and markets
- Monetary policy
- Financial contracts, funds and instruments in Islamic Finance.
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I share with you the PDF document, download it for free: “Islamic Finance: big interest, no interest – A comparison with traditional finance”
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