Regime uncertainty : interest rate based debt financing system
Joint Authors
Mirakhur, Abbas
Shaukat, Mughis
Source
Journal of Islamic Business and Management
Issue
Vol. 2, Issue 2 (31 Dec. 2012), pp.15-30, 16 p.
Publisher
Riphah International University Riphah Centre of Islamic Business
Publication Date
2012-12-31
Country of Publication
Pakistan
No. of Pages
16
Main Subjects
Economics & Business Administration
Abstract EN
Evidence has been mounting (over the centuries) that the interest based debt financing regime is under ever increasing distress.
All of the earlier crises whatever label they carried - exchange rate crisis or banking crisis -have been debt crises in essence.
At the present, empirical research suggests that the debt-to-GD? ratio of the richest members of the G-20 threatens to touch 120% mark by 2014.
Moreover there is also evidence that out of securities worth $200 trillion in the global economy, no less than three-fourth represent interest based debt.
It is difficult to see how this massive debt volume can be validated by the underlying productive capacity of the global economy.
This picture becomes more alarming when it is realized that the growth of the global economy is anemic at best while the interest rate on debt is sure to exceed the rate of growth of global GD? for the foreseeable future.
This paper argues that the survival of the interest based debt regime is becoming less tenable, as is the process of financialization that has accompanied the growth of global finance over the last four decades.
It further argues that Islamic finance, with its core characteristic of risk sharing, may well be a viable alternative to the present interest based debt financing regime.
American Psychological Association (APA)
Mirakhur, Abbas& Shaukat, Mughis. 2012. Regime uncertainty : interest rate based debt financing system. Journal of Islamic Business and Management،Vol. 2, no. 2, pp.15-30.
https://search.emarefa.net/detail/BIM-601863
Modern Language Association (MLA)
Mirakhur, Abbas& Shaukat, Mughis. Regime uncertainty : interest rate based debt financing system. Journal of Islamic Business and Management Vol. 2, no. 2 (Dec. 2012), pp.15-30.
https://search.emarefa.net/detail/BIM-601863
American Medical Association (AMA)
Mirakhur, Abbas& Shaukat, Mughis. Regime uncertainty : interest rate based debt financing system. Journal of Islamic Business and Management. 2012. Vol. 2, no. 2, pp.15-30.
https://search.emarefa.net/detail/BIM-601863
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 28-30
Record ID
BIM-601863