Sub-prime issue: How Islamic financing able to solve the problem during financial crisis
Sub-prime crisis rise due to imprudent credit practice by the lender beside the other factors. Unethical element consist in the conventional financial system such as permissible speculation and allowable selling of debt’s mortgages via asset securitization created the situation become worse. In Isl...
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| Format: | Monograph |
| Language: | English |
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Universiti Utara Malaysia
2009
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| Online Access: | https://repo.uum.edu.my/id/eprint/2461/1/Subprime_Issue-How_Islamic_Financing_Able_To_Solve_The_Problem_during_Crisis.pdf |
| Summary: | Sub-prime crisis rise due to imprudent credit practice by the lender beside the other factors. Unethical element consist in the conventional financial system such as
permissible speculation and allowable selling of debt’s mortgages via asset securitization created the situation become worse. In Islam, Islamic financing have their own way to fiancé the mortgages which is permissible in Islamic Principles. Islamic Principles prohibits the payment and collection of interest and highly complex instrument such as
derivatives and other “creative” accounting practice are banned. Transaction must be backed by real asset that avoiding repackaged sub-prime mortgages. The credit rating
under Islamic banking and finance evaluates real term business potential and growth trends, instead of evaluating manipulation asset value which causing damages to the
credit and economy. |
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