User logiusrhlg


Member for:	2 years (since Aug 6, 2022)
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Website:	https://all4webs.com/ijarahfinance/halal-finance.htm
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About:	In an era where interest and debt are forbidden, a alternative to traditional financial institutions is emerging in the form of Islamic finance. This kind of financing is free of the issue of interest as well as other types of complications in the financial sector and instead considers the fund's suppliers as partners and joint-venturers of the venture. Islamic finance considers money to be "potential capital" until it joins forces with other resources, like bonds, stocks, or other assets. Islamic finance recognizes that money is valued in time when it functions as capital, and also prohibits gambling, speculation, and taking risks in the process. Because Islamic finance is based on the concept of supply-and-demand, it is insulated from large economic fluctuations caused by financial instability. In fact, it can even wipe out the growth of economic activity in case of financial crisis. In contrast, conventional banking practices require the suspension of the conversion of currency in the event of a bank run and demand massive amounts of liquidities from the central bank. In this model, the money stock, 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 the fact that Islamic banks don't engage in speculation or interest-bearing loans. In contrast to conventional banking, Islamic banks engage in direct investment and trade, and their liabilities are secured by savings. This means that money is generated through sales and not through the stroke of pen. Further, Islamic banks invest their deposits in real assets and do not make their own money. This means that they do not create excess purchasing power.

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