| ...Islamic financial institutions have not been affected by the crisis. |
...This crisis has broken many of the principles of economic liberalism that America has advocated just as it also proved that leaving everything to the regulations of the market without control and oversight leads to catastrophes striking the heart of the macro economy as a result of the unruly desires of greedy capitalists....There is no better way to describe the root cause of this crisis than with the term ‘gambling’...
...nobody paid attention to the fact that this boom was not based on a real economic product but on a series of inflated debts. Bonds, securities, derivatives, options and hedging contracts were being traded in the secondary market. So, could the same disaster occur in a market that is regulated by Islamic Sharia?
The answer is no; a disaster of this magnitude could not occur in markets governed by Islamic Sharia because transactions in Islamic Sharia are based on the real exchange of goods and utilities. Islamic law forbids usury and outlaws the selling of what you do not own except under strict conditions such as the selling of commodities where the full price is paid in advance whilst that which is valuated [the product] is postponed, which reduces the risks in the transaction. Islamic Sharia also forbids the postponement of buying and selling [forward contracts], which is the case with derivative contracts, and debt trading, except under certain conditions that prevent usury, manipulation and deceit. For these reasons, Sharia scholars have condoned trading in securities and derivatives of all kinds, which also explains why Islamic financial institutions have not been affected by the crisis.
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