Money creation and control from Islamic perspective
This paper deals with familiar facts in monetary economics from an unfamiliar angle. It argues that it is not factual to regard the legal tender money and bank credit as of different genus: they work in tandem to the same ends in an economy, conventional or Islamic. Also, it does not matter what serves as money – solid gold or flimsy paper – for keeping its value stable; only the blind would argue that staff is indispensable for walking. Money is just an instrument: it was never nor can ever be classified into Islamic and non-Islamic. What it does – good or bad – depends on how we use it. Money does not generate crises; its mismanagement does. It follows that the refuge the world is searching today from recurring financial crises does not lie in money substance: history testifies that national economies could not remain turmoil-free during the centuries of the yellow metal sway over the monetary scene. The paper concludes that it is the human factor that has been the source of good or evil for mankind including money matters. And the quality of human factor true religion can alone improve: morality without faith is rudderless.
|Date of creation:||23 Jan 2011|
|Date of revision:||21 Dec 2011|
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- Gary Gorton & Lixin Huang, 2002. "Banking Panics and the Origin of Central Banking," NBER Working Papers 9137, National Bureau of Economic Research, Inc.
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8130, University Library of Munich, Germany, revised 07 Apr 2008.
- Zubair Hasan, 2008. "Credit creation and control: an unresolved issue in Islamic banking," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 1(1), pages 69-81, April.
- Cizakca, Murat, 2010. "The case against the Islamic gold dinar," MPRA Paper 26645, University Library of Munich, Germany.
- Hasan, Zubair, 2007. "Ensuring exchange rate stability: Is return to gold (Dinar)possible?," MPRA Paper 8134, University Library of Munich, Germany.
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