User drianavris


Member for:	2 years (since Aug 7, 2022)
Type:	Registered user
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Website:	https://en.gravatar.com/sionnawlzj
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About:	In the world where debt and interest are forbidden, a alternative to traditional financial institutions is emerging in the form Islamic finance. This form of finance is free of interest and other forms of complication in the financial sector and instead considers the people who provide funds as joint-venturers and partners of the venture. Islamic finance considers money to be "potential capital" until it is joined by other resources, such as bonds, stocks and other investments. Islamic finance recognizes that money is valued in time when it functions as capital, and prohibits speculation, gambling, and taking risks in the process. Since Islamic finance is based on the concept of supply-and-demand, it is insulated from large economic fluctuations due to financial instability. In fact, it can even stop the growth of economic activity in case of financial crisis. Contrary to this, traditional banking practices must suspend the exchange of currency in the event of a crisis and demand large amounts of new liquidities from central banks. This model will see the amount of money or M, rises in proportion to the real income (P), but the price of the stock will be lower. Another difference in conventional and Islamic banking is that Islamic banks don't engage in interest-bearing loans or speculation. Unlike conventional banking, Islamic banks engage in direct investment and trade, and their liabilities are secured by savings. This means that money is generated out of sales and not the stroke of a pen. Further, Islamic banks invest their deposits in real assets and do not generate their own currency. This means that they do not generate excess purchasing power.

Activity by drianavris

Score:	10 points (ranked #189)
Title:	Newbie
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