Sharia Finance: Saudi Mufti Solves Crisis?
Grand Mufti Abdelaziz Al al-Sheikh told worshipers assembled for his annual sermon to pilgrims that the global financial crisis is a result of using interest as the foundation for global financial systems. The Sharia forbids the paying or receiving of interest.
The mufti, without any known academic accomplishments in the area of finance, could easily be dismissed as ill-qualified. However, one could perhaps interpret the message less literally.
As clichéd as it may sound, the root cause of the 2007 sub-prime mortgage crisis is greed. The bankers were too greedy for commissions and on the other side of the table home-owners were too greedy for big houses.
The Sharia may not be quite up-to-date for governing modern financial voodoo, but peel away the words and the right basic ideas are all pretty much there.
Bo-yun Liu
