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Reforming Islamic Finance إصلاح المالية الإسلامية

Author

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  • Mabid Ali Al-Jarhi

    (Professor of Economics, Ankara Social Sciences University, Turkey)

Abstract

Pessimists would rather declare the Islamic finance industry as clinically dead. Such dim expectation would become a reality when the industry will completely switch to selling present for future money through contrived sale contracts. The writings are plenty on the wall. We need to listen and respond seriously. Calling for the reform of the industry could be the last attempt to save it. Rusni Hassan’s paper (2020) provides a good perspective of the current problem, albeit a little dispassionate. This comment provides a brief explanation of the theoretical rationale and the macroeconomic benefits of Islamic finance. It diagnoses the problem of Islamic finance as that of convergence. In addition, a few modest proposals are presented to mitigate the problem. المتشائمون يفضلون إعلان الموت السريري لصناعة التمويل الإسلامي. وسوف يكون هذا التوقع حقيقة واقعة عندما تتجه هذه الصناعة كليةً إلى بيع الحاضر بالآجل بعقود مستقبلية. والكتابات حول هذه الإشكالية كثيرة ومتعددة، لذلك نحن بحاجة للاستماع لها والرد عليها بجدية، فربما تكون هذه هي الفرصة الأخيرة لإصلاح هذه الصناعة. تقدم ورقة رسني حسن (2020م) تشخيصاً جيدًا للمشكلة الحالية، على الرغم من عدم التسليم بكل ما ورد فيها. ويقدم هذا التعليق شرحًا موجزًا للأساس المنطقي والفوائد الاقتصادية الكلية للتمويل الإسلامي. ويشخص مشكلة التمويل الإسلامي على أنها مشكلة التقارب. بالإضافة إلى ذلك، فإنه يقدم مقترحات متواضعة للتخفيف من هذه المشكلة.

Suggested Citation

  • Mabid Ali Al-Jarhi, 2020. "Reforming Islamic Finance إصلاح المالية الإسلامية," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 33(2), pages 101-107, July.
    • Handle: RePEc:abd:kauiea:v:33:y:2020:i:2:no:7:p:101-107
    DOI: 10.4197/Islec.33-2.7
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    References listed on IDEAS

    as
    1. Rusni Hassan, 2020. "Reforming Islamic Finance: Why and How? إصلاح التمويل الإسلامي: لماذا و كيف؟," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 33(2), pages 67-80, July.
    2. Michel Rod & Fawaz Baddar Alhussan & Tim Beal, 2015. "Conventional and Islamic banking: perspectives from Malaysian Islamic bank managers," Post-Print hal-01563037, HAL.
    3. Fisher, Irving, 1907. "The Rate of Interest," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number fisher1907.
    4. Aslam Mei Nur Widigdo & Marimin & Idqan Fahmi & Irfan Syauqi Beik, 2016. "How Islamic is Islamic Banking in Indonesia? مدى "إسلامية" البنوك الإسلامية في إندونيسيا؟," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 29(2), pages 153-165, July.
    5. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66(6), pages 467-467.
    6. Al-Jarhi, Mabid, 1980. "A Monetary and Financial Structure for an Interest-Free Economy: Institutions, Mechanism & Policy," MPRA Paper 66741, University Library of Munich, Germany, revised 2004.
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    8. Al-Jarhi, Mabid, 2017. "Islamic Finance at Crossroads," MPRA Paper 88555, University Library of Munich, Germany, revised Aug 2018.
    9. Sarwar Uddin Ahmed & Md. Ashikur Rahman & Samiul Parvez Ahmed & G. M. Wali Ullah, 2014. "Pricing Linkage between Islamic Banking and Conventional Banking:The Case of Bangladesh," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 3(4), pages 84-97, October.
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    More about this item

    Keywords

    Islamic economics; Islamic finance; Interest rate; Monetary theory; Real and nominal transactions; Islamic finance regulation. الاقتصاد الإسلامي، التمويل الإسلامي، سعر الفائدة، النظرية النقدية، المعاملات الحقيقية والإسمية، أنظمة التمويل الإسلامي.;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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