Islamic Finance May Be Cure For Crisis, Vatican Suggests

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By HAKAN KALAYCI

As world markets suffer under the weight of the ongoing global financial crisis, the Vatican has put forward a new suggestion, arguing that the principles of Islamic finance may represent a possible cure for ailing markets.

The Vatican’s official newspaper, L’Osservatore Romano, recently published an article titled “Islamic finance proposals and ideas for the West in crisis,” prepared by Italian economists Loretta Napoleoni and Claudia Segre, in which it was suggested that the basic rules of Islamic finance could relieve suffering markets and particularly international financial systems. Noting that Islam prohibits “riba,” Arabic for the usurious loaning of money, the article argued that “sukuk bonds,” securities that comply with Islamic law, may be an alternative to interest. The article stressed that sukuk bonds are always real investments and never speculative.

The article said that in this atmosphere of crisis banks should take Muslims as an example and that the Islamic finance system may pave the way for the establishment of new rules in the Western world. The Vatican has suggested that the current capitalist system has failed. Pope Benedict XVI recently harshly criticized the capitalist system and the greediness of bank owners in the West.  In the meantime, the Vatican itself has been badly affected by the crisis. It had recorded an 18 billion euro budget surplus in 2007, but this number had declined to 6 billion euros by the end of 2008 and is expected to fall further in 2009.

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12 Comments »

  1. James February 26, 2010 at 8:24 am - Reply

    Why must the Vatican (Christian) Religious City talk of Islamic Finance as the “cure” and mention “riba,” instead of calling it “usury” as in the Christian Bible and move with speed to lift it from multi-trillion banks it owns across the world? Muslims read the Quraan diligently and follow its teaching so read the Bible diligently and follow its teaching.

    If the bible is the Vatican’s principal guide, the they may read from Exodus 22:25 and stop calling the solution from Islamic Finance systetem,otherwise I watch this space;it could be more than just “suggesting a slution to solve the crisis”.

    P.S Exodus 22:25 begins God’s statement of his law against usury,
    especially to extort money from the poor. “If thou lend money to any
    of my people that is poor by
    thee, thou shalt not be to him as an usurer, neither shalt thou lay
    upon him usury”.

  2. stock trading June 2, 2009 at 1:06 pm - Reply

    OHH Great post! I’m loving your website;

  3. a m malik March 14, 2009 at 8:11 pm - Reply

    Mr Mootezzalla has had no idea how an islamic banking works and he jumps to the conclusions. No sir the way it works is that it is bneneficial to both the investor and the manager. Basically it routes the sleeping partners – which in the present case is the depositor. Interest is totally forbidden
    and if the Christians and jews read their Bible and Torah properly they will find the same . It is for no other reason but this that when a jew gives a loan to another jew he does not take a penny, but from the others- on to who torah is not applicable he mints money. Allah Hafiz

  4. Anonymous March 12, 2009 at 2:20 am - Reply

    18 billion EURO surplus in 2007… can someone tell me what products and/or service the Vatican produces that create such wealth? Or are they living off the donations of the people? And how do they spend this money and where do they spend this money? What poor country have they helped bring out of poverty if they had 18 billion Euro in their hands in 2007?

  5. Bill Cash March 11, 2009 at 7:05 pm - Reply

    I just stopped by your blog and thought I would say hello. I like your site. Looking forward to reading more down the road.

  6. mootazzella March 11, 2009 at 2:09 pm - Reply

    the idea of islamic finacial system appraised by vitican city economists is only ment to say that religous fanatics have the same agenda of thier everlasting support to the capitalist and exploiters .
    the hon. vitican economist doest have any idea and understanding of islamic economical system which is reffering cannot work in this era of 21st century and more over the islamic system pleads for no interest which means that the capitalist is eligeble to take more money with out interest from bank and become more and more richer . for god sack such things and idiot briefings is the source of encourging stupid barbar fanatics in pakistan as it gives more strentgh to their agenda . well if its too good woud u like to hire molla umar and kazi husain ahmed and benladen to help u honourable vitancanies.

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