Munich Personal RePEc Archive

The impact of the financial crisis on the global economy: Can the Islamic financial system help?*

Trabelsi, Mohamed Ali (2011): The impact of the financial crisis on the global economy: Can the Islamic financial system help?*. Published in: Journal of Risk Finance , Vol. 12, No. 1 (2011): pp. 15-25.

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Abstract

Research Question/Issue - The aim of this article is to analyse the different measures taken by the G7 and G20 leaders to face this crisis and to show whether such decisions represent a return to protectionism.

Research Findings/Insights - We proposed the introduction of a new economic system based on Islamic banks’ principle which calls for cancelling interests. This line of thinking might solve speculation problems and put this type of crisis to an end.

Theoretical/Academic Implications - Our article represents a point of view on the financial crisis, the return to protectionism and the role of Islamic banking.

Practitioner/Policy Implications - This financial crisis pushed most developed countries to lower their banking rates and to implement null- approximating interest rates, a move which replicates the principle adopted by Islamic banks.

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