Charter Mercantile Agency

Islamic banks and financial markets worldwide: signs of economic growth

Introduction

The subject of my current research work is "Islamic banks and global financial markets" and how they interrelate to drive sustainable growth of economic development. Islamic finance are closely linked to the vision of Islam for economic development, which attaches great importance to the achievement of socio-economic justice and welfare.
The subject of Islam and economic development raises a number of
issues, one of which is on the relevance of the subject of a
discussion forum on Islamic finance. This question is not difficult
response because the finances and development are closely linked.
Finance is not an end in itself, it is an essential means
development, which in turn causes an increase in financial resources
accelerate development. The juxtaposition of Islam and economic
development in the title also raises other questions. One of these
is whether Islam is an asset or a liability for development and if
Islam and development can coexist without harming each other. If Islam
is capable of promoting development and the second and third questions
are the type of development that Islam visualization, and
reasons for the failure of Muslim countries to achieve development
kind.

As the worsening economic crisis in the world, global financial institutions have set about to re evaluate the different systems and business models in place. It is no exaggeration to say that virtually every public institution and traditional banking has been affected by the global financial crisis. In contrast, Islamic banking has largely escaped the fallout from the financial crisis, thanks to rules that prohibit this kind of business ventures that the main institutions infected.

There is no doubt that the current global financial crisis has brought the field of Islamic finance is an excellent opportunity to broaden its appeal beyond Muslim investors as a haven against speculative excess. The message may have particular resonance in the West after the collapse of the U.S. mortgage market left banks holding hundreds of billions of dollars of nearly worthless credit instruments tied to home loans through a network of complex structures. Investors traumatized by the credit crunch are looking for insurance and security. The stricter rules imposed on lending by Islamic law to provide such guarantees and security. Many of the structures speculative and high risk and financing methods that have proven to be the nemesis of the Western financial industry are forbidden under Islamic law. Islamic finance practices are probably more fiscally conservative, which requires the direct participation of investors in plans that do not esoteric strategies such as parking assets in off-balance sheet vehicles.

While Islamic finance is no longer a novelty in the international financial world, the U.S. has yet to adopt this model. Although some financial institutions in the United States entering this market, they are rare. According to some experts and financial gurus, the U.S. is almost a decade after the Asian financial and European counterparts since the adoption and the implementation of Islamic banking is concerned.

What is Islamic finance?

To understand how Islamic banks have largely escaped unscathed from this financial crisis, it is essential to have a good knowledge of the fundamentals of Islamic finance. Islamic finance is based on sharia, or Islamic law, which gasoline.