The Vatican says Islamic finance system may help Western banks in crisis as alternative to capitalistm.
Friday, 06 March 2009 15:10
The Vatican
offered Islamic finance principles to Western banks as a solution for
worldwide economic crisis.
Daily Vatican newspaper,
'L'Osservatore Romano, reported that Islamic banking system may help
to overcome global crisis, Turkish media reported.
The Vatican
said banks should look at the ethical rules of Islamic finance to
restore confidence amongst their clients at a time of global economic
crisis.
"The
ethical principles on which Islamic finance is based may bring banks
closer to their clients and to the true spirit which should mark
every financial service," the Vatican's official newspaper
Osservatore Romano said in an article in its latest issue late
yesterday.
Author
Loretta Napoleoni and Abaxbank Spa fixed income strategist, Claudia
Segre, say in the article that "Western
banks could use tools such as the Islamic bonds, known as sukuk,
as collateral".
Sukuk may be used to fund the "'car industry or the next Olympic
Games in London," they said.
They
also said that profit share, gained from sukuk, may be an alternative
to the interest. They
underlined that sukuk system could help automotive sector and support
investments in infrastructure area.
Islamic
sukuk system is similar to bonos of capitalist system. But
in sukuk,
money
is invested concrete
projects
and profit share is distributed to clients instead of interest
earned.
Pope
Benedict XVI in an Oct. 7 speech reflected on crashing financial
markets saying that "money vanishes, it is nothing" and
concluded that "the only solid reality is the word of God."
The Vatican has been paying attention to the global financial
meltdown and ran articles in its official newspaper that criticize
the free-market model for having "grown too much and badly in
the past two decades."
The Osservatore's editor,
Giovanni Maria Vian, said that "the great religions have always
had a common attention to the human dimension of the economy,"
Corriere della Sera reported today.
Posted
by fudzail
at
8:59
AM
Labels: islamic banking, vatican
