Monday, January 23, 2017

Islamic finance in Europe (24)

Continuation
The author writes:
Divine prohibition of usury, is a common feature of the three monotheistic religions.
It does not, in fact, prohibit every return on:
§  capital;
§  or trade.
Its purpose is to protect the weaker contracting party.
Some scholars state that, since capital does not have a stable value over time and space, its price cannot be fixed.
But it must take account the actual economic benefits the debtor has enjoyed upon its usage.
Therefore, there must be a link between:
§  the results of the usage of capital;
§  and the amount paid for it.

From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)

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