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**loving Islam** · 01-11-2008, 02:18 AM

رد: The International Financial System Crisis

Aspects of the International Financial System Crisis
The signs & symbols of collapse in the International Financial System
emerged and caused panic, fear and worry for the money-makes & wealthy
people, left the financial institutions & brokers confused in setting
up the salvation plans and made the governmental officials afraid of
losing their positions and calling for the scientists, specialists and
experts to find the way out.

Here are few examples about the financial crisis signs:
The hurry in withdrawing the deposits from the banks because the
capital is coward as stated by the mass media.
Several financial institutions have stopped giving loans to the
companies & individuals fearing the difficulty of recovery.
Shortage of liquidity negotiated by individuals, companies and
financial institutions and this caused a severe deflation in the
economic activity and all other aspects of life and made the borrowers
unable to repay their debts.
Drop of the negotiations in the financial markets and the resulted
confusion of rise and fall indexes.
The decrease of power level used by the companies due to the shortage
in liquidity and freezing the loans by the financial institutions
except under high interest rates and difficult guarantees.
The decrease of sales, especially in the real estates, cars and other
sectors due to the low liquidity.
The increase of unemployment levels due to the bankruptcy and
liquidation, and every employee or worker fears dismissal.
The increase demand for the social subsidies from the governments.
The decrease of consumption, spending, saving and investment levels
which caused stagnancy, unemployment, liquidation and bankruptcy.

All this invite us to ask: What are the main & real reasons behind
this crisis?

The Main Reasons Behind the International Financial Crisis:
The right diagnosis of the crisis is the master key for finding the
right remedy. It is only the accurate, right, neutral and objective
view which can introduce the perfect solution for the difficult
problems.

The famous economists worldwide, including winners of Nobel Prize like
Maurice Allias, said: (The capitalist economy system is depending on
certain concepts and rules which are the main cause of its collapse if
not amended immediately).

There are several known economists predicted that the new
international economic system is founded on principles leading to its
failure.

Here are some of the reasons mentioned by them for the current
crisis:

First: The economic morals corruption such as: monopoly, deception,
the fabricated rumors, lies, fraud, exploitation and the delusive
transactions which all caused injustice treatment by the wealthy
people and creditors against the poor and debtors. This injustice will
make the wronged people complain from injustice and the creditors will
complain from debtors and the result will be social revolutions when
they refrain from repaying their debts and loans.

Second: Money became the substance of tyranny and the weapon of the
tyrants for controlling policies and taking the sovereign decisions in
the world to the degree that the materialists became worshippers of
money.

Third: The usury banking system relies on the interest rate system and
operates within the frame of dealing, trading, purchasing and selling
of debts. Whenever the interest rate of the deposit increases, the
interest rate of the loans given to individuals and companies will
increase similarly and all of this will benefit the banks and
financial brokers while the borrowers will suffer injustice in paying
the loans taken by them for the purpose of consumption or production.
Some economists, like Adam Smith, the father of economists, said: "The
real development and the rational use of the production factors will
not be achieved unless the interest rate became nil" and they
considered the alternative method is the system of sharing profits and
losses because it enhance stability and security. They further said:
"The interest rate system will make the money goes to the hands of
small group of people who will control the wealth totally".

Fourth: The traditional financial and banking system relies on the
method of scheduling the debts against a higher interest rate or
replacing the due loans with new ones of higher interest rate, exactly
like what the Arab before Islam was saying: (Pay now or increase the
interest rate). This process will cause additional liabilities on the
borrowers who were unable to repay the first loan due to the higher
rate of interest.

Fifth: The international financial system and the financial markets
system are mainly depending on the financial derivates system which,
in turn, depends on delusive transactions which, in turn, depend on
probabilities & possibilities i.e. there are no true exchange of goods
and services, it is just gambling and betting. Not only this, some of
these transactions are depending on credits taken from the banks in
the form of loans which can lead to a financial crisis in case of
loss.

Sixth: The bad manners of the financial brokerage institutions which
induce people to take loans, deceive them and exploit their ignorance
to take loans from the financial institutions. They request high
commissions if the risks were high and the borrower alone will bear
the adverse consequences thereof and this ultimately will lead to the
financial crisis.

Seventh: The expansions in applying the credit cards system
(Overdraft) which caused high financial liabilities on the users who
will bear higher interest rates if he could not repay the debt until
he is put to jail, mortgage his car or house. This is exactly what
happened to many holders of such cards, caused them confusions in the
budget of their homes, and led finally to a crisis in certain usury
banks.

The Destructive Effects of the International Financial System Crisis
Until this sensitive stage of collapse signs in the International
Financial System which suffered a severe paralysis, the following
adverse effects have appeared:

First: The Panic, fear and confusion of all people, including:
The presidents, rulers and ministers.
Owners of the financial institutions and the in-charge of the
financial markets.
Owners of the financial brokerage institutions.
Owners of the deposits in the banks and otherwise.
The borrowers from banks, the clients of banks and owners of the
deposits.
The consumers who are threatened with price rise waves.
The employees and workers who are threatened of losing their
positions.
The poor who are living under subsidies and charity.
This crisis became like the cancer of the blood, all the time
circulating in the economic life arteries.

Second: Bankruptcy of some banks and financial institutions due to the
lack of liquidity and the withdrawal of the deposits by its owners;
consequently, some governments, through its central banks, were
obliged to rescue the remainder in order to avoid the total collapse
of the economic life which may cause bankruptcy to the country as a
whole.

Third: Bankruptcy of the companies which were dealing in loans against
interest and some of them stopped certain production lines and began
executing the mortgages and guarantees available with it;
consequently, this causes disorder in their cash flows.

Fourth: Losing the employment and the rise of the percentage of people
who are looking for the social and governmental subsidies which, in
turn, caused extra burdens on the budgets of the countries and delayed
several new investment projects.

Fifth: Some countries have imposed more taxes in order to compensate
the deficit in their budgets due to the rise of support budgets toward
the companies and banks which are close to bankruptcy or to support
the deposits and otherwise.

Sixth: The borrowers have lost their assets and homes which were
mortgaged against such loans. They became homeless, helpless, poor and
immigrants.

**loving Islam** · 01-11-2008, 02:19 AM

رد: The International Financial System Crisis

The Effect of the International Financial System Crisis on the Islamic
Economy & Islamic Banks:
Many people are asking themselves: What are the effects of the
international financial system crisis on the Islamic banks, Islamic
financial institutions, the Islamic investments and the Islamic
finance institutions?
The opinions of the Islamic economists and the experts of the Islamic
institutions should not just react to the financial and banking
international crisis; contrary, they should highlight the Islamic
economy rules and regulations and demonstrate the applications thereof
by ensuring that such crisis was a natural result for the incompliance
with the Islamic economy rules and regulations. We will take this
topic in detail in the following paragraph and will concentrate on the
rules of security and stability in the Islamic financial and economic
system which guarantees avoiding such crisis.

The Rules & Regulations of the Security & Stability in the Islamic
Economy:
The Islamic financial and economic system and its financial
institutions are relying on several regulations which guarantee
stability & security and reduce the risks resulting from the man-made
regulations which rely upon the interest system and the financial
derivates. Here are the most important Rules & Regulations:

First: The Islamic financial and economic system depends on set of
values, virtues and morals like: trust, credibility, transparency,
clearness, facilitation, cooperation, integrity and solidarity. This
set of values and morals are the main guarantee for achieving the
security and stability for all clients. The Islamic Sharia prohibits
the financial and economic transactions which depend on deception,
lies, gambling, fraud, prejudice, ignorance, exploitation, monopoly,
greediness, injustice and taking the money of people wrongfully. The
compliance with the Islamic morals and values is considered a worship
to Allah The Almighty which entails reward from Allah and regulates
the manners of the Muslim, whether he was producer or consumer, seller
or buyer, and whether in case of activity or stagnancy, stability or
instability.

Second: The Islamic financial and economic system depends on the
principle of sharing profits and losses and the actual negotiation and
exchange of money and assets under the Islamic regulations which
ensure realizing the permissible benefits, the actual interaction
between the businessmen, money makers, and expert and working under
the rules of justice, right and exert all-out efforts to reduce the
severity of any crisis; therefore, there is no party who is always
winner and there is no party who is always loser; it is the just
sharing of profits and losses.

The economists and scientists of the Islamic economy have set up a
group of Islamic investment and finance contracts abiding with the
Islamic regulations, such as: finance by way of speculation, sharing,
Murabaha, Istesna', Salam, Ijara, Muzara'a, Musaqa and otherwise (for
more information, kind visit the website of Dar Al Mashora www.Darelmashora.com
).

The Islamic Sharia has prohibited all finance contracts by way of
investment depending on the loans and interests which are considered
one of the main reasons behind the current international financial
crisis.

Third: The Islamic Sharia has prohibited the financial derivates which
depend on delusive transactions, prejudice and ignorance. The
scientists of the Islamic economy considered such transactions as
prohibited gambling.

Moreover, the experts and scientists of the man-made economy confirmed
that one of the reasons of the international financial crisis is the
financial derivates system because it does not motivate or create
actual economic development; contrary, it is a bad mean for earning
money and causes inflation & rise in prices. Consequently, this will
cause bad morals and will accelerate the collapse of the financial
institutions which depend on such system, exactly like what happened
to the markets of East Asia countries.

Fourth: The Islamic Sharia has prohibited all kinds & forms of selling
debts against debts, like: discounting bills and the post date
cheques. Moreover, the Islamic Sharia has prohibited the system of re-
scheduling the debts against increasing the interest rate. The Prophet
– Peace be upon him – prevented selling debts against debts.

Moreover, the experts and scientists of the man-made economy confirmed
that one of the reasons of the international financial crisis is
trading in debts by certain financial brokerage companies.

Fifth: The Islamic financial and economic system is depending on the
principle of facilitating the repayment by the debtor who is not able
to repay for reasons beyond his control. Allah The Almighty said: {And
if the debtor is in a hard time (has no money), then grant him time
till it is easy for him to repay, but if you remit it by way of
charity, that is better for you if you did but know} (Al-Baqara:
280).
The experts and scientists of the man-made economy emphasized that one
of the main reasons behind this financial crisis is the inability of
the debtor to repay, increasing the interest rate by the creditor or
revolve the loans with higher interest rate or against mortgage on the
debtor, then the creditor will leave the debtor homeless, helpless and
will cause social and human difficulties causing several
psychological, social, political and economic problems.

Applying the Islamic Economy Rules & Regulations is the only Way Out
of This Crisis:
The results of analyzing the current financial crisis demonstrated
that the crisis was the outcome of the following man-made
regulations:
The interest system (Riba) on the deposits and paying interests on the
loans.
Trading in debts.
Scheduling the debts by increasing the interest rates against
increasing the repayment period.
Debts sale system.
The financial derivates system which depends on the probability and
luck.

The Islamic economy, with financial institutions and banks, prohibits
all of these systems which were the main reasons behind the current
crisis and the main source of contradiction with the natural attitudes
of the human being and their legal rights.

The Islamic Sharia has prohibited the system of imposing interests on
the loans and credits and permitted the finance and investment on the
basis of profits and losses sharing.

The Islamic Sharia has further prohibited all forms of prejudice,
ignorance, deception, fraud, lies, rumors, exploitation, monopoly,
taking the money of people wrongfully and emphasized on honesty,
trust, clearness, demonstration and transparency.

**loving Islam** · 01-11-2008, 02:20 AM

رد: The International Financial System Crisis

Summary: The Rules & Regulations of the Islamic Economy are the Only
Way Out of the Crisis
When the people comply with the rules and regulations of the Islamic
Economy they will find their way out of this serious crisis. Allah The
Almighty Said: {if there comes to you guidance from Me, then whoever
follows My Guidance shall neither go astray, nor fall into distress
and misery * But whosoever turns away from My Reminder (i.e. neither
believes in this Quran nor acts on its orders, etc.) verily, for him
is a life of hardship, and We shall raise him up blind on the Day of
Resurrection}(Taha: 123, 124. He said also: {Allah will destroy Riba
(usury) and will give increase for Sadaqat (deeds of charity, alms,
etc.) And Allah likes not the disbelievers, sinners} (Al-Baqara:
276).

A Call to the Economists, Money-Makers & Businessmen
To the scientists, experts and judges who wish to reform the man-made
financial and economic systems which caused the misery & misfortune to
the human beings and caused serious crisis every time and then, hurry
up to the Islamic Sharia, the Islamic rules and regulations, the
religion of guidance, mercy and charity. Allah the Almighty said:
{Indeed, there has come to you from Allah a light (Prophet Muhammad
PBUH) and a plain Book (this Quran) * Wherewith Allah guides all those
who seek His Good Pleasure to ways of peace, and He brings them out of
darkness by His Will unto light and guides them to a Straight Way
(Islamic
Monotheism)}(Al-Ma'eda: 15, 16).

To the economists, money-makers and businessmen, hurry up to the
Islamic Economy, its rules and regulations. It is the only way for
security, stability, prosperity and development. Avoid dealing in Riba
(usury & interests) which is the most vicious evil in the financial
and economic transactions so that you can spare yourselves the
consequences of the war with Allah The Almighty & His Messenger. Allah
said: {O you who believe! Be afraid of Allah and give up what remains
(due to you) from Riba (usury) (from now onward), if you are (really)
believers * And if you do not do it, then take a notice of war from
Allah and His Messenger but if you repent, you shall have your capital
sums. Deal not unjustly (by asking more than your capital sums), and
you shall not be dealt with unjustly (by receiving less than your
capital sums)} (Baqara: 278, 279).

To those who wish to reform the international banking system, hurry up
to the Islamic banking system. The scientists and economists confirmed
the failure of the international banks which deal with usury and
interests. Allah the Almighty Said:
{Allah will destroy Riba (usury) and will give increase for Sadaqat
(deeds of charity, alms, etc.) And Allah likes not the disbelievers,
sinners} (Al-Baqara: 276).
The Prophet – Peace be upon him – said: (If adultery and usury "Riba"
prevail in any country, Allah The Almighty will destroy it)).
[Narrated by Abu Ya'la from Abdullah bin Masoud].

A Call to All Muslims
To the people who are confused in their life, straying in darkness of
the nights, hurry up to Islam again.
To those who wish to reform society and get rid of its problems,
difficulties and rescue it, hurry up to Islam.
To those who are standing at the door of reform and hesitant about the
right way to be taken, hurry up to Islam.
To those who were confused with means and lost their aims, hurry up to
Islam, it is the right way.
To those who spent their life in fruitless experiments under the
instructions of hesitant minds and confused thinking, hurry up to
Islam.
To those sincere & faithful people, hurry up to Islam.

To all of you, I address this Quranic Call:
Allah The Almighty Said: {O people of the Scripture (Jews and
Christians)! Now has come to you Our Messenger (Muhammad PBUH)
explaining to you much of that which you used to hide from the
Scripture and passing over (i.e. leaving out without explaining) much.
Indeed, there has come to you from Allah a light (Prophet Muhammad
SAW ) and a plain Book (this Quran) * Wherewith Allah guides all those
who seek His Good Pleasure to ways of peace, and He brings them out of
darkness by His Will unto light and guides them to a Straight Way
(Islamic Monotheism)} (Al-Ma'eda: 15, 16).

**رقية 2** · 07-08-2009, 11:19 PM

رد: The International Financial System Crisis

wow ... very fantastic topic ... thanks for all ur efforts

although its very long ..its agood topic

thanks alot

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The International Financial System Crisis

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