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The present paper aims at discussing the reasons why the crisis had less of an effect on the Islamic system and the countries that use it by presenting the origins and the development of the crisis and its results, supported by statistical data from 2008 to 2011.

It then attempts to give an overview of the Islamic financial system by focusing on its historical development and background and presents the basic notions with which it operates, as well as the mechanisms of the system. Using the main notions, the paper will analyse them in the frameworks of the crisis and will examine the extent to which the application of a certain key notion contributed to the ‘safety’ of the Islamic banking system against the crisis.

Lastly, the paper will draw on the conclusions reached by the above mentioned aspects and try to decipher the probability of the inclusion of certain elements of the Islamic financial system in the conventional capitalist economic system. A SWOT analysis is then used to determine the major points of this idea with regard to its strengths, weaknesses, opportunities and threats.

Renáta Janka Janka Tóth is currently completing her graduate studies at the University of Southern Denmark in Middle East Studies.

April 24, 2012

Guglielmo Rinaldini

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I like this comment! What's this?

I am sure you are an excellent analyst and your intention is under "bona fide" idea, but I am involved in finance and in financial field not exists something called "islamic finance": it is only a manner to share an ideological thinking. because finance is based on yield. Also the Hawala System is responsible of Money Laundering and the unclear transaction is in favor of every kind of crimes as terrorism and so on. Through Hawala System and the acquisitions of "Phone Centers" and "Internet Points" by Bangla People (are not hindu, are Bangla because "casually" are islamics...) exists now a network that permits also this kind of illegal business. Then I think that a manner to restart finance, a new finance that will create opportunities of real business, will be through Private Placement based on trading of BG-MTN in the hands of true financiers and not in the hands of terrorists or ideologized people.

Tags: | Islamic | Finance |

April 27, 2012

Niklas Anzinger, Student of Philosophy & Economics, Platinum Contributor (728)

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I have to agree with Guglielmo Rinaldini on that point. The most important critique of the notion of "Islamic Economics" was written by Timur Kuran, "Islam and Mammon" (2005), which the author should take into account.

May 11, 2012

Jimmi Kamil

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that a system may be misused by criminals does not mean that the system is wrong. The conventional system is being misused many times every single day. I think the merits of the islamic Finance lie on their benefit to the grass roots; not to the Banks only. These day's trends in the politics (pirates party in Germany, and the demos in USA, Wall Street) show that people are open to receive alternatives. So why not give it a serious thought? I find the article really good.

Tags: | islamic finance |

May 21, 2012

Guglielmo Rinaldini

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Dear Jimmi,
if it is your real name,
simply not exists FINANCE without yield, then what are the basis of the self-styled "islamic finance"? And over all how it run? The real problem that the true finance have now is exactly that it is doped by "black momey" that come from China (a country that have no respect for private property and copyright and that survive upon slavery and fake brands...in the name of communism...), from the left parties useful idiots in banks that instead of make business as in the old and aristocratic finance create ghost funds to collateralize the corruption and the money laundering of these parties that in clear are against rich and richness...and the islamic finance...it also have a goal: finance terrorism and/or counter democratic procedures in politic.

Tags: | terrorism | islamic finance | Finance |

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