Alasrag, Hussien (2010): Global Financial crisis and Islamic finance.
Download (489kB) | Preview
The world economy is still suffering the crisis, considered the most severe since the Great Depression, where economic downturn at historic magnitude and many countries across the globe, irrespective of their development level, are still under strain dealing with this crisis. The severe global crisis that has spilled from the financial sector to the real economy, including international trade in manufactures, commodities and services. The onset of the present crisis can be traced back to July 2007 with the liquidity crisis due to the loss of confidence in the mortgage credit markets in the United States. At first, there was uncertainty about the possible spillovers to the rest of the economy, and there was also discussion about the risks of contagion and decoupling, that is to say, the capacity of other countries – especially developing countries – to isolate themselves from the problems originating in the United States (which is the largest market for many countries). The hope was that the crisis would be restricted to financial markets, with few repercussions on the real economy and the rest of the world. This hope was shattered in September 2008 as the crisis entered an acute phase, with strong downward fluctuations in the stock markets, substantially reduced rates of economic growth, volatile exchange rates, and squeezes in demand and consumption, leading to falls in industrial production and decreasing flows of international trade and FDI, and causing impacts on related areas such as transfer of technology. The crisis has also been accompanied by increases in unemployment, with concomitant declining incomes and demand. The severity of the current crisis has led to the evaluation of the foundations of the capitalist financial system and the search for ideas and solutions. While some have proposed that the Islamic finance serves as a vehicle for recovering from the international financial crisis and The Islamic banking industry may be able to strengthen its position in the international market as investors and companies seek alternate sources of financing. Other economists have argued that Islamic finance, is a different way of structuring financial dealings; but, it is not a totally different financial system. This paper tries to note the main causes and the impacts of the current financial and economic crisis. In addition to discuss the belief that the Islamic finance and its prospective is a viable alternative to the ailing global financial system.
|Item Type:||MPRA Paper|
|Original Title:||Global Financial crisis and Islamic finance|
|English Title:||Global Financial crisis and Islamic finance|
|Keywords:||financial and economic crisis , Islamic finance|
|Subjects:||F - International Economics > F3 - International Finance > F37 - International Finance Forecasting and Simulation: Models and Applications
D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D53 - Financial Markets
G - Financial Economics > G2 - Financial Institutions and Services
Z - Other Special Topics > Z1 - Cultural Economics; Economic Sociology; Economic Anthropology > Z12 - Religion
N - Economic History > N2 - Financial Markets and Institutions
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates
F - International Economics > F3 - International Finance > F33 - International Monetary Arrangements and Institutions
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
|Depositing User:||Hussein Elasrag|
|Date Deposited:||23. Apr 2010 08:16|
|Last Modified:||13. Feb 2013 20:31|
1. Abbas Mirakhor, Islamic Finance and Globalization: A Convergence?, Journal of Islamic Economics, Banking and Finance (JIEBF) ,Volume - 3, Number - 2, July - December 2007.
2. Al Ghannam, Mohamed,29. May 2009,The Financial Crisis & The Future of The Egyptian Economy, Online at http://mpra.ub.uni-muenchen.de/15474/
3. Allen & Overy LLP, 25 February 2009, Islamic Microfinance Report.
4. IMF. (2008). World Economic Outlook Database, October 2008.
5. IMF. (2009). World Economic Outlook Database, April 2009.
6. IMF. (2009). Global Economic Slump Challenges Policies, World Economic Outlook Update, January 28, 2009.
7. Mervyn K Lewis.(2008).In what ways does Islamic banking differ from conventional finance?, Journal of Islamic Economics, Banking and Finance (JIEBF) ,Volume - 4, Number - 3, September - December 2008.
8. Monzer Kahf ,The Global Financial Crisis:Ideas for Long Term Solutions: Short Notes,Translated By Dr. Ahmed El-Gharbawy .at:http://www.islamonline.net.
9. Organisation of the Islamic Conference Statistical, Economic and social research and training centre for Islamic countries (SESRIC), The current global financial crisis, Monthly Reports, May 2009.
10. Robert J. Shiller.(2008) . The Subprime Solution: How Today's Global Financial Crisis Happened and What to Do about It (Princeton, NJ: Princeton University Press).
11. Shayerah Ilias .(2009). Islamic Finance: Overview and Policy Concerns, Congressional Research Service, February 9, 2009.
12. Sarah S. Al-Rifaee ,Islamic Banking Myths and Facts.at:www.arabinsight.org
13. The commission of experts on reforms of the international monetary and financial system, Recommendations,19 March 2009 at : http://www.un.org/ga/president/63/letters/recommendationExperts200309.pdf.
14. Umer Chapra.(2009).The global financial crisis some suggestions for reform of the global financial architecture in the light of islamic finance, Center for Islamic Area Studies at Kyoto University (KIAS),Japan , June 2009.
15. Umer Chapra.(2008). The global financial crisis: Can islamic finance help minimize the severity and frequency of such a crisis in the future?, A paper prepared for presentation at the Forum on the Global Financial Crisis to be held at the Islamic Development Bank on 25 October 2008.
16. UNCTAD. (2009). Global economic crisis: implications for trade and development, Trade and Development Board,Trade and Development Commission ,First session, Geneva, 11–15 May 2009.
17. UNCTAD. (2009). Assessing the Impact of the Current Financial and Economic Crisis on Global FDI Flows.www.unctad.org.
18. Zamir Iqbal.(2007) .Islamic Financial Systems, Finance & Development / June 1997.
19. Zamir Iqbal.(2007).Challenges Facing Islamic Financial Industry, Journal of Islamic Economics, Banking and Finance (JIEBF) ,Volume - 3, Number - 1, January - June 2007