Abstract
Regarding the formation of financial crises in monetary and financial markets of advanced economies and its transmission to other countries through financial markets and foreign trade, a solution is pointed out which is called the reform of financial, monetary and banking structure. In spite of various theories about the source of crises, studies in this field show that usurious banking structures are the main source of crises. The curing method of this economic disease is to prevent somehow the existing time-lag between “deposits interest rates” and “loans interest rates”, which creates fluctuations in supply and demand of financial sources. That is to say, banks should not function as a conventional economic firm, but should function as a financial intermediate. Banking structural reform and new financial instruments will be introduced in this regard.Profit and Loss Sharing (PLS) Banking and its sub-systems as Joaleh Financial Sharing (JFS) and Mudarebeh Financial Sharing (MFS) with new financial instruments of “Partnership (Mosharekah) Certificate”, “Subscripted (Pazireh) Certificates” and “Future Certificate” are introduced at commercial and specialized banking levels. “Interest-Free Bonds” in four different groups of “Central Bank Interest-free Bonds”, “Banking Interest-free Bonds”, “Treasury Interest-free Bonds” all in varieties on domestic money and Foreign Currency are also introduced which in addition to elimination of usury, can be efficiently used as secure financial instruments at central, commercial and retail banking levels. “Saving Qarzul-Hasanah Certificate” as a kind of Interest-Free Bonds are also introduced. Non-Usury Script-less Security Settlement System (NSSSS) based on information and communication technology has been put forward for creating a secondary market of financial instruments transaction which provides the necessary background for financial structure reform. Squandering prevention and waste prevention and economic ethic teachings are also introduced as supplements in solving crises.
Highlights
In spite of what is mentioned, the occurrence of the crisis was not caused by America’s housing sector depression, but the housing sector falls itself was a consequence of the crisis
According to what is proved, the wavy and sinusoid movement nature of economic activities automatically leads to conditions which move the economy from prosperity to depression and crisis and again to recovery and prosperity
That is to say, when the economy produces more than consumption, commodities accumulate in storehouses, and in order to sell the accumulated inventory, the seller reduces prices
Summary
In spite of what is mentioned, the occurrence of the crisis was not caused by America’s housing sector depression, but the housing sector falls itself was a consequence of the crisis. In PLS system, regardless of the bank to be private or public, the basis for fixing loan rate is the return of real sector economy, and bank operates as intermediate of funds or attorney and receives a commission, and the remaining profit of investment activity is paid to the depositor.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Accounting & Finance Review
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
