User fridiekbzz


Member for:	2 years (since Aug 7, 2022)
Type:	Registered user
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Website:	https://www.cheaperseeker.com/u/dentunrkeo
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About:	In an era where interest and debt are not allowed, a new alternative to traditional finance 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 treats the suppliers of funds as partners and joint-venturers of the venture. Islamic finance considers money to be "potential capital" until it joins forces with other resources, such as stocks, bonds, and other investments. Islamic finance acknowledges time values money when it functions as capital, and also prohibits gambling, speculation, and taking risks in the process. Because Islamic finance is founded on the concept of supply-and-demand it is not impacted from the massive economic fluctuations caused by financial instability. Actually, it could even stop any economic growth in the case of a financial instability. By contrast, conventional banking practices must suspend the conversion of currency in the event of a crisis, and require large quantities of liquid assets from the central bank. This model will see the amount of money, or M, increases in proportion to the real income (P) however the price level will rise more slowly. Another difference between conventional and Islamic banking is that Islamic banks are not involved in speculation or interest-bearing loans. In contrast to conventional banking, Islamic banks engage in direct investment and trade and their obligations are backed by savings. This means that money is generated through sales and not the stroke of pen. Further, Islamic banks invest their deposits in real assets and do not generate their own currency. This way, they do not create excess purchasing power.

Activity by fridiekbzz

Score:	10 points (ranked #189)
Title:	Newbie
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Voted on:	0 questions, 0 answers
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