Several financial and economic crisis including the Asian Financial Crisis in 1997 and recent crisis; subprime mortgage crisis has triggered financial instability all over the world. The conditions in the global financial system has deteriorated sharply as the idiosyncratic funding and asset liquidity tighten and unexpected-larger losses associated with sub-prime related portfolios have weaken the balance sheet of global financial institutions. Furthermore, these disruptions in the financial markets also causing constraint to the flow of credit to household including families and to the business entity. Household balance sheets have come under pressure to arising job losses, falling net worth, and tight credit conditions (IMF, Global Financial Stability Report, April, 2009). Therefore, many governments have taken initiatives and scale up intervention measures in attempts to restore the financial stability in their financial system.
Reflecting the impact of the crises and excessive capital particularly in petrodollar country including the Gulf Cooperation Council (GCC) , therefore it provides an opportunity for Islamic financial institutions (IFS) globally including Islamic banks to grow significantly in recent years. For example, shariah -compliant assets rose by 28.6 percent in 2009, to $822 billion dollar from $639 billion dollar in 2008 (The Banker, November 2009). According to Moody’s, 2009, Islamic banking assets and assets under management are expected to reach USD 1 trillion by 2010. In addition, potential market for this system is worth at least USD 5 trillion.
IFS including Islamic banking has been incepted globally about three decades ago, and the number has grew from one in one country in 1975 to over 300 instituti...
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... Islamic banks in Malaysia for the period of 2000 to 2008. Islamic banks in this study consist of only full-fledged Islamic banks which operated under the Islamic Banking Act 1983 while commercial banks are operated under the Banking and Financial Institutions Act (BAFIA) 1989. Commercial bank terms will be used widely and interchange with conventional bank concept in the research.
1.5 STRUCTURE OF THE STUDY
The structure of the study is as follows. Chapter 2 provides literature review of the study. Chapter 3 discusses overview of the specifics of Islamic banking from analytical and prudential perspectives. Chapter 4 explains the theoretical framework, methodology, and the variables and data used in the study. Section 5 presents the analysis and empirical results. Section 6 summarizes the conclusion, policy implication and suggests topics for further research.
The financial crisis of 2007–2008 is considered by many economists the worst financial crisis since the Great Depression of the 1930s. This crisis resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. The crisis led to a series of events including: the 2008–2012 global recessions and the European sovereign-debt crisis. The reasons of this financial crisis are argued by economists. The performance of the Federal Reserve becomes a focal point in this argument.
One of the most interesting indigenous groups in the world is the Batek of Malaysia, this is a group of people that live in the oldest rain forest of peninsular Malaysia. Orang ASli means “Original people” in the native Malay Language, and they truly are the original people of the land. Being a nomadic group of hunters and gatherers, means that they are at the mercy of the land and the elements for survival. Batek beliefs note that, the rainforest was created by “superhuman” beings for the Batek to use and will destroy the world and everything on it if the Batek were ever to leave the rainforest ( K.M. Endcott 1979a; Lye 2004). The Batek believe that the “superhuman” beings created the forest for the Batek to harvest, build houses in, and provide also to decorations for their ceremonial rituals.
Diamond and Rajan (2009) found that investment misallocation is the proximate cause of the credit crisis. In response to the crisis, corporations, governments, and households reduced on investment and decreased consumption. Federal Reserve provides an adaptable monetary policy to guarantee that the world did not suffer in deep recession. The low interest rates increase a large of demand of housing. House pricing become more value for sale and rent in many countries. Credit crisis is initially occurred in U.S because the financial invocation of U.S. Hence, there is more marginal-credit-quality buyer into the market.
Financial crises are a constant theme through generations. People can lose all their savings and somehow the richest 1% of the country will stay above the cumulative distributive mean of average earnings. It seems that everyday working middle class people are effected through these catastrophes losing all of their savings and future generations are now forever. Through evaluating the similarities and differences between the Great Depression of the 1930’s and the Great Recession of 2007/2008, we can learn how future financial crises can be avoided.
The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.
The modern Islamic Finance industry is young, its timeline begin only a few decades ago. However, islamic finance is involving rapidly and continues to expend to serve a growing population of muslims as well as conventional.
The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008).
The limited of the people whose dealing with the bank her in Oman. Most of the people are from Pakistani community only and the percentage of the others people is very weak.
Debt crisis is becoming common and faced by most citizens in Malaysia. Between June 1997 and January 1998 a financial crisis swept like a brush fire through the "tiger economies" of SE Asian. Over the previous decade the SE Asian states of Thailand, Malaysia, Singapore, Indonesia, Hong Kong, and South Korea, had registered some of the most impressive economic growth rates in the world. Their economies had expanded by 6% to 9% per annum compounded, as measured by Gross Domestic Product. This Asian miracle, however, appeared to come to an sudden end in late 1997 when in one country after another, local stock markets and currency markets imploded. When the dust started to settle in January 1998 the stock markets in many of these states had lost over 70% of their value, their currencies had depreciated against the US dollar by a similar amount, and the once proud leaders of these nations had been forced to go cap in hand to the International Monetary Fund (IMF) to beg for a massive financial assistance. (W.L.Hill, n.d.)
In 2008, the world experienced a tremendous financial crisis which is rooted from the U.S housing market. Moreover, it is considered by many economists as one of the worst recessions since the Great Depression in 1930s. After bringing a huge effect on the U.S economy, the financial crisis expanded to Europe and the rest of the world. It ruined economies, crumble financial corporations and impoverished individual lives. For example, the financial crisis has resulted in the collapse of massive financial institutions such as Fannie Mae, Freddie Mac, Lehman Brothers and AIG. These collapses not only influenced own countries but also international scale. Hence, the intervention of governments by changing and expanding the monetary and fiscal policy or giving bailout is needed in order to eliminate and control enormous effects of the financial crisis.
According to the IMF’s 2008 UAE ML and FT report (2008), the UAE lacks a precise duty on the part of financial institutions, to identify the primary and beneficial ownership as well as the control of the majority of companies with whom they have business de...
As the world has recently passed through the global financial crisis that begun in 2008 in the USA with the banks’ collapsing, analysts are giving different opinions and making new economic hypothesizes about the origin of, as well as the process of different countries escaped from the crisis. Among all these new “theories”, the case of Islamic banks is interesting in terms of its nature and consequences. In my essay, I will try to highlight the basic principles of the Islamic finance, the reasons of the restriction of interest, the most important tools used by Islamic banks in economic activities and brief explanation of them, and finally my view point of the probable future improvement of the Islamic financial system.
Warwick J. McKibbin, and Andrew Stoeckel. “The Global Financial Crisis: Causes and Consequences.” Lowy Institute for International Policy 2.09 (2009): 1. PDF file.
Our group have been assinged to discuss on the topic above but in Islamic Banking perspectives. Therefore, before going any further, let us clarify definition of the Principles of Islamic Banking and clarify what are the elements involve in the Principles of Islamic Banking. Beside, we will also do some comparison of product or services offered by both banks which are conventional and Islamic banking. Apart from that, we will also clarify the problems or challenge faced by the agency which practices the Islamic banking in their agency.
middle of paper ... ... inga (1999) and Pasiouras and Kosmidou (2007). The above estimation has left some questions pertaining to fill the gap by attempting to identify and measure factors that determine the profitability performance of commercial banks in Malaysia. What are bank-specific determinants and macroeconomic determinants influence on banks’ profitability in Malaysia compare to other countries?