You are looking at 31 - 40 of 118 items :

  • natural rate of interest x
  • Islamic Economics and Finance x
Clear All
You do not have access to this content

Akhand Akhtar Hossain

capital goods. Low real interest rates, rapid employment growth and fiscal transfers raised both consumption and investment spending. Increased public investment under the government’s economic transformation programme, especially in the oil, gas and infrastructure sectors, is an example of successful Keynesian ‘pump priming’ that has, unsurprisingly, boosted economic activity and raised the level of employment. The indications are that Malaysian macroeconomic management has an intelligent and perceptive activist dimension that does not sit well with unfettered market

You do not have access to this content

Akhand Akhtar Hossain

This book reviews key aspects of central banking and monetary policy in selected Muslim-majority countries. While reviewing country-specific experiences and issues in inflation and monetary policy, and analysing them from an historical context, emphasis is given to the evolution of Islamic banking and finance and the consequent institutional developments for maintaining price stability. One recurring theme is that, although Islamic banking and finance may have created some complexities, it remains consistent with Classical monetary theory and has created opportunities for improving the infrastructure of central banks and monetary policy to maintain both price and economic stability. The introduction of Islamic banking and finance strengthens the argument for low and stable inflation and rule-based monetary policy. Monetary policy frameworks in these countries include exchange-rate pegging, monetary targeting and inflation targeting under varied restrictions on capital flows. Macroeconomic problems under these regimes are also highlighted and their policy implications drawn.
You do not have access to this content

M. Umer Chapra

reverse flow of funds as soon as there was a negative shock. Shocks can result from a number of factors, including natural calamities and unanticipated declines in the economies of borrowing countries due to changes in interest rates or relative export and import prices. Such shocks lead to a decline in confidence in the borrowing country’s ability to honour its liabilities in foreign exchange. The rapid outflow of foreign exchange, which would not have been possible in the case of equity financing or even medium- and longterm debt, led to a sharp fall in exchange rates

You do not have access to this content

Akhand Akhtar Hossain

, rather than the interest rates, are administratively determined. There is presently neither theory nor empirics to suggest that these profit dividend rates have a stable linkage with the inflation rate. Financial Institutions The Iranian banking sector comprises 28 financial institutions. They are grouped under four categories: (1) four public commercial banks; (2) four public specialized banks, associated with different sectors of the economy, namely agriculture, housing, export and mining industry; (3) 16  small private banks; and (4) four large privatized banks. The

You do not have access to this content

Muhammad Umer Chapra

against interest: is it compelling? 143 or the principal amount of the loan with the predetermined rate of return stands in the way. There was a reverse flow of funds as soon as there was a negative shock. Shocks can result from a number of factors, including natural calamities and unanticipated declines in the economies of borrowing countries due to changes in interest rates or relative export and import prices. Such shocks lead to a decline in confidence in the borrowing country’s ability to honour its liabilities in foreign exchange. The rapid outflow of foreign

This content is available to you

Akhand Akhtar Hossain

institutions. Islamic financial institutions operate under some financial sector and real sector restrictions, such as the prohibition of interest (riba), avoidance of contractual uncertainty (gharar), avoidance of speculative activity, including gambling (maysir) and prohibition of investment in prohibited (haram) industries, especially alcoholic beverages, gambling, pork products and pornography. Islamic financial institutions are therefore considered as specialized institutions with Islamic characteristics. For this reason, Muslim- ajority countries remain the natural

This content is available to you

Munawar Iqbal and David T. Llewellyn

9/11/01 3:08 pm Page 4 4 Islamic banking and finance: new perspectives on profit-sharing and risk price of finance needs to include an allowance for the risks involved. Similarly, the rates of return to the suppliers of finance should also reflect the risks taken. In conventional systems a major route for this is through the rate of interest, with risks of alternative projects or loans being reflected in different risk premia incorporated in interest rates on different loans. Clearly, this route is not relevant in Islamic finance, which means that alternative

You do not have access to this content

Gabriella Gimigliano

borrower’s credit risk only; (3) on the liability side, the depositors don’t take on the bank’s credit risk: accordingly, EU law imposes the compulsory membership on one of the deposit-guarantee schemes recognized in the home member state upon the entities applying for a European licence. Furthermore, in conventional banking the provision of a predetermined interest rate is intended as a natural feature of sight accounts and any member state forbidding banks from remunerating sight accounts would infringe the freedom of establishment. Indeed, in the Caixa Bank case15 the

You do not have access to this content

Laurent Weill

client has not fully paid on the due date or soon after. The vast majority of loans in the sample were conventional loans, as only 5 per cent of the loans were Islamic ones. Nevertheless, the number of Islamic loans was sufficient for such an investigation, given the size of the full sample. It is of interest to stress that most Islamic loans were murabaha or ijara. They found that default rates were much lower for Islamic loans, that is, the hazard rate on Islamic loans was less than half that of conventional loans. How to explain this finding? The authors suggest

You do not have access to this content

Muhammad Umer Chapra

substitute rather than natural parents.19 Consequently, they develop psychological problems which adversely affect their moral and intellectual development and lead to juvenile delinquency. The quality of the future generation consequently declines. Any society where the quality of the future generation goes down significantly may not be able to maintain its moral, intellectual, technological and military supremacy in the long-run. In addition to the rise in family disintegration, there is also a decline in the willingness to get married. The marriage rate is currently at