The financial Tower of Babel: roots of crisis
Purpose - The aim of this paper is to explore and discuss the causative factors of the current financial crisis from an Islamic perspective. This paper also examines Islamic finance as an alternative financial system and a potential long-term solution to financial instability. Design/methodology/approach - The paper provides descriptive, analytical and comparative analyses. Findings - The paper offers insights into the causes of the current international financial crisis. It highlights an alternative and a solution to this dilemma in the form of Islamic finance and stresses the stability of the Islamic finance system. Practical implications - The findings presented in this paper can be used by policy makers, regulators and practitioners in both the Islamic and conventional financial sector as they provides insights into factors that can insulate the market from future crisis. However, to expect a wholesale transformation to an Islamic financial system is idealistic. Originality/value - This paper contributes to the understanding of Islamic finance principles and its value as a solution to the current and any future financial crises. A highly original conceptual idea is used in the metaphorical comparison to the Tower of Babel. The findings of this research will be of interest to western and Islamic financial practitioners, policy makers and academicians.
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Volume (Year): 3 (2010)
Issue (Month): 4 (November)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009.
"Varieties of Crises and Their Dates,"
Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly
Princeton University Press.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, number 8973.
- Reinhart, Carmen, 2009. "The Second Great Contraction," MPRA Paper 21485, University Library of Munich, Germany.
- Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
- George A. Akerlof, 2009. "How Human Psychology Drives the Economy and Why It Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1175-1175. Full references (including those not matched with items on IDEAS)
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