Jesus saves, Moses lends, Muhammad invests – Islamic finance accounts for 1 trillion in banking

“The interesting thing about Islam,” says Professor Constant Mews, “is that it was a much more commercial culture from the outset than Christianity.”

And from around the middle of the eighth century to the middle of the 13th, while European Christians were struggling through the Dark Ages, the Islamic world enjoyed a golden age.

Arab merchants had a lot to do with it.

“They developed alternative ways of regulating funds,” says Mews.

“In particular the core Islamic principle is simply one of sharing profit and loss. The desire is to promote investment by taking commercial risk.

“Risk, incidentally, is an Arabic word, referring to where you lend money to others without requiring a return unless there is profitable growth.”

And for some 500 years, this financial model underpinned advances in science, the arts, architecture, and innovation generally. Then came the Crusades and the Mongol hordes, and the Islamic model of finance declined, the space becoming filled by that other model.

Islamic finance, however, is undergoing something of a renaissance.

It is now a USD1 trillion industry…Mohamed Ariff continues the litany of statistical growth: there are 57 majority-Muslim nations, 76 countries which already practice Islamic banking, 350 banks, 15 insurance companies and about 1,200 mutual funds.

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European Union needs a President – says German Finance Minister

The European Union needs to become more integrated with a common finance policy and a central government, German finance minister Wolfgang Schaeuble said Wednesday (16 May).

“I would be for the further development of the European Commission into a government. I am for the election of a European president, he said at an event in Aachen, reports Reuters.

He said this is a longterm response to the current eurozone crisis, which many have said has been exacerbated by the fact that the EU lacked the tools – such as a central transfer system – to effectively deal with it.

“We certainly won’t manage it in this legislative period,” said Schauble referring to the creation of a finance ministry but noted that for a currency union, a part of finance policy needs to be harmonised.

That should be the “lesson” learned from the current crisis.

He said he wants to widen citizens participation in EU politics beyond voting for MEPs to voting for the president of the European Commission, noting that the recent French presidential elections, including a three-hour TV debate between the two candidates, attracted interest far beyond the country’s borders.

via EU Observer

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