Credit creation and control : an unresolved issue in islamic banking
Other Title(s)
"توليد" و مراقبة الائتمان : إشكال عالق لدى المصارف الإسلامية
Author
Source
Publisher
King Abdulaziz University Islamic Economics Institute
Publication Date
2008-04-30
Country of Publication
Saudi Arabia
No. of Pages
14
Main Subjects
English Abstract
This paper deals with a still unresolved issue - credit creation and control - in an interest free banking system.
The available literature on the subject is scanty, controversial and inconclusive.
The paper holds that credit creation per se is not un- Islamic; the essential point is how credit is generated and used.
It argues that credit creation cannot be banished; it is an imperative for frictionless adjustment of money supply to unavoidable fluctuations in its demand in modern economies.
It seeks to correct the misunderstanding in the literature that banks create credit ex nihilo.
Demand for money apart, fiscal policies and foreign exchange transaction erode the credit controlling power of the central banks.
The paper blames major difficulties including those of credit creation and control on the evolution of Islamic banking on the same pattern as its mainstream counterpart and suggests some structural modifications.
Finally, it finds the conventional weapons of credit control inefficacious for use in an interest free banking system and suggests the inclusion of a ratio of cash to bank advances among them.
The paper has some important technical and policy implications.
Language
English
American Psychological Association (APA)
Hasan, Zubayr. 2008-04-30. Credit creation and control : an unresolved issue in islamic banking. The 7th International Conference in Islamic economics : thirty years of research in islamic economics solutions and applications of contermporary economic issues 24-26 Rabie Awal 1429 H 1-3 April 2008 G. , pp.271-284.Jiddah Saudi Arabia : King Abdulaziz University Islamic Economics Institute.
https://search.emarefa.net/detail/BIM-858129
Modern Language Association (MLA)
Hasan, Zubayr. Credit creation and control : an unresolved issue in islamic banking. The 7th International Conference in Islamic economics : thirty years of research in islamic economics solutions and applications of contermporary economic issues 24-26 Rabie Awal 1429 H 1-3 April 2008 G. Jiddah Saudi Arabia : King Abdulaziz University Islamic Economics Institute. 2008-04-30. , pp.271-284.
https://search.emarefa.net/detail/BIM-858129
American Medical Association (AMA)
Hasan, Zubayr. Credit creation and control : an unresolved issue in islamic banking. The 7th International Conference in Islamic economics : thirty years of research in islamic economics solutions and applications of contermporary economic issues 24-26 Rabie Awal 1429 H 1-3 April 2008 G. Jiddah Saudi Arabia : King Abdulaziz University Islamic Economics Institute. 2008-04-30. , pp.271-284.
https://search.emarefa.net/detail/BIM-858129
Data Type
Book chapters
Notes
Includes bibliographical references : p. 282-283
Record ID
BIM-858129