Interesting article in The Age today about potential of Islamic Finance as an alternative to the Wall Street model. It is quoting the Malayisan PM Badawi.
You cannot disagree with his comments about Wall Street and the 'shadow banking' model (i.e. trading what you do not own) but I would be wary of the morality clauses. Then again is a moral clause, like shunning gambling and alcohol, necessarily any worse than the 'greed is good' Wall Street model?
Be interested in what other know about Islamic Finance? Also what do we think?
Here is an extract from the article. I have included the link below.
Badawi called for a new financial system to replace the Wall Street model.
"We have inherited a system where people can trade what they do not own and the resulting inflationary pressure in the global market has caused immense damage to the economic wellbeing of the world's poor," he said in a speech.
"Such is the impact of unbridled greed in the financial system where there is no accountability on money lending. ... The world is beginning to appreciate the need for alternative financial arrangements."
He said Islamic finance - which shuns interest and avoids profiting from industries such as alcohol and gambling - was "gaining credibility as an alternative."
"I do believe that Islamic finance has a bright future in the global financial system. This is something that we can capitalise upon," Badawi added, while noting the lack of harmonised standards in Islamic banking.