THE FINANCIAL CRISIS: COMMENTS FROM ISLAMIC PERSPECTIVES

  • Muhammed Shahid Ebrahim University of Nottingham

Abstract

I plan to summarize the discussion of my three eminent colleagues along the following framework (incorporating the Islamic perspective): (i) What is the root cause of the current subprime crisis? (ii) What is the impact of the crisis on the global economy? and (iii) What lessons do we derive from the ongoing crisis to restructure the Islamic financial architecture and to improve the economic status of the underprivileged? All three colleagues discuss issues (i) and (iii). Dr. Chapra is the only exception shedding some light on issue (ii). My perspective is slightly different from all three, as I have been trained as a theorist in financial economics especially focusing on the twin issues of asset pricing and financial contracting. I will therefore emphasize on the areas of my expertise and not comment on issues relating specifically to monetary economics, where I have no exposure. Likewise, I will not comment on the issue of bayc al-dayn (sale of debt), which is highly debatable and needs to be re-analyzed in the light of the Qur’OEn, Sunnah and modern financial economics.

JEL classification: Z12, G10, K00

Key words: Islamic economics, Islamic banking, Maqasid al-Shariah.
How to Cite
Ebrahim, M. S. (1). THE FINANCIAL CRISIS: COMMENTS FROM ISLAMIC PERSPECTIVES. International Journal of Economics, Management and Accounting, 16(2). Retrieved from https://journals.iium.edu.my/enmjournal/index.php/enmj/article/view/147
Section
Discussion Forum