Assessment one Essay Example | Topics and Well Written Essays - 500 words

Assessment one - Essay Example A similar holding was made in Harris 3 where the plaintiff lost his claims for loss of time and expense despite withdrawal of the advertised furniture from sale. An exception is the Carlill case 4 where an advertisement sufficiently constituted an offer to sell because it was a unilateral offer to sell to the world, which can be accepted by satisfying the condition required. Also, purchase of the product was enough consideration and the intent to be legally bound was proven by the deposit of  £1000 to the Bank. Thus, Chantelle’s advertisement is just an invitation to treat. Moreover, the exchange between Ben and Chantelle over the telephone lacks certainty and merely involves a request for information similar to Stevenson v McLean 5 where it a request for information was held not a counteroffer. Ben’s offer is only constituted the moment he wrote to Chantelle but such an offer is subject to acceptance, which did not happen. Felthouse v Bindley 6 held that acceptance must be communicated to the offeror. The lack of valid acceptance here militates against the forming of a valid

Interpreting and Translation Essay Example for Free

Interpreting and Translation Essay The Similarity and Differences between Translation and Interpreting 1. Similarity †¢ Both transferring the message from Source Language (SL) into Target Language (TL) †¢ Both retaining the message †¢ Both restructuring or reproducing †¢ Both having SLT and TLT †¢ Both having the target audience 2. Differences. |Translation |Interpreting | |The medium is in written form |The medium is in oral form | |In reproducing the translation in the receptor language: |In reproducing the translation in the receptor language: | |not on the spot |on the spot | |can use dictionaries or thesaurus |direct translation (being able to translate in both directions, | |have more time to check and recheck the translation |without the use of any dictionaries) | | |have no time to check and recheck the translation) | |The doer : translator |The doer : Interpreter | The Theory. Interpreting consists of presenting in the Receptor Language, the exact message of what is uttered in the Source Language either simultaneously or consecutively preserving the tone of the speaker, such as formal and informal expressions, emotions, feelings, the choice of words, high and low pitch or tone in uttering words, etc. The Process of Interpreting There are 4 elements involve in the process of interpreting: †¢ the speaker †¢ the audience †¢ the message †¢ the interpreter The Process: (in TL) Messagesmessages†¦ (in SL) (1) (2)(3) (4). (1) Listening and understanding a spoken message of the Source Language ( (2) Storing/note-taking the message ( (3) Retrieving the message ( (4) Reproducing the message of the source language into the receptor language. Modes of Interpreting 1. Simultaneous Interpreting In simultaneous interpreting, the speaker and the interpreter speak almost at the same time. 2. Consecutive Interpreting In consecutive interpreting, the speaker speaks first, then after he/she finish his/her complete segment/speech, the interpreter takes the turn. Generally, during consecutive interpreting the speaker stops every 3-5 minutes (usually at the end of every paragraph or a complete thought) and the interpreter then steps in to transfer what was said into the receptor language. Model of Communication Flow in Consecutive Interpreting INTERPRETER SPEAKERAUDIENCE : indirect communication : direct communication Qualifications of a Good Interpreter †¢ An interpreter has to have knowledge of the general subject of the speeches that are to be interpreted. †¢ An interpreter has to have general erudition and intimate familiarity with both cultures. For example: when a speaker talks about American agriculture, then the interpreter has to know about American agriculture. †¢ An interpreter has to have extensive vocabulary in both languages (SL and RL). †¢ An interpreter has to have the ability to express thoughts clearly (easily to understand) and concisely (in brief) in both languages. †¢ An interpreter has to have an excellent note taking technique for consecutive interpreting. †¢ An interpreter at least 2-3 years of booth experience for simultaneous interpreting. In addition, in note taking of a paragraph uttered by a speaker, an interpreter has to be able to grab the main idea/topic of that paragraph. Therefore, the interpreter will understand what the paragraph that the speaker talks about. The Competencies Required for an Interpreter †¢ Language Competence A language competence is a good command of the source language and the receptor language which includes: ? Lexicon ? Grammatical structure ? Pronunciation †¢ Transfer Competence? Ability to reproduce a variety of synonymous or analogous expressions in both language; ? Ability to capture and reproduce register variations; ? Ability to recognize and reproduce domain-specific expressions in a form which will be regarded as ‘natural’ by the respective users; ? Ability to combine verbal and non-verbal communication cues from the SL and reproduce them in appropriate combinations in the RL; ? Ability to identify and exploit rhythm and tone patterns of languages in order to determine and utilize the ‘chunks’ of speech so as to maximize the efficiency of the interpreting; ? Ability to speedily analyze the utterance in the context of the communication in order to anticipate the direction in which the argument is proceeding and the strategy being used in developing the argument. †¢ Cultural Competence ? The possession of knowledge enabling the interpreter to comprehend the totality of the communicative intent of the speaker; ? Extra-linguistic knowledge about the world of the speaker and the audience; ? Social conventions, institutional practices, taboos, anthropologically and historically relevant elements of the cultures. †¢ Appropriate Technique ? Knowledge of the dynamic communication: Control of the speed; Control of the congruence of the tone of voice due to the emotional charge of the utterance and that of the interpretation of the utterance. ? Note-taking to avoid omission: Interpreter’s notes are very different from those of, say, a stenographer, because writing down words in the source language makes the interpreters job harder when he has to translate the speech into the target language. Many professional interpreters develop their own ideogramic symbology, which allows them to take down not the words, but the thoughts of the speaker in a sort of language-independent form. Then the interpreters output is more idiomatic and less source-language bound. ? Ordering information output; ? Voice production (audible, clear, unambiguous); †¢ Good Short Term Memory ? The comprehension ability to store information; ? The ability to recall with a high degree of accuracy what the speaker has said. †¢ Professional Competence? The ability to make independent judgments in terms of the linguistic, ethical, socio-cultural and effective issues which arise in an interpreted situation. The Skills Required for the Interpreter †¢ Listening skill: being able to ‘get the message’; †¢ Speaking skill: being able to ‘transmit the message’ (quality of voice, choice of idiom, vocabulary, phrasing, etc. ); Interpreting Ethics †¢ Impartiality: to carry out professional duties to the best of his/her ability regardless of who the clients are in terms of race, social and economic status, ethnicity, etc. In other words, the interpreter has to be fair and not taking side. †¢ Conflict of interest means to act without regard to other interests such as personal or financial gain. Things that Have to be Prepared in Becoming an Interpreter †¢ Be familiar with the subject of the conference and the subjects of speeches; †¢ Try to speak with the speaker and find out the general contents of speech and the time s/he intends to dedicate to the speech; †¢ Find copies of overhead transparencies, slides, or paper; †¢ Prepare a glossary for the interpretation to gather all the vocabulary which you might need for the job (terms, nouns, verbs, abbreviations, etc. ). ***

Light Touch Regulation and the Global Financial Crisis

Light Touch Regulation and the Global Financial Crisis Carla Vecchio Contents (Jump to) 1.0 Light Touch Regulation and the Global Financial Crisis 2.0 Stress Scenarios and Credit Modelling 1.0 Light Touch Regulation and the Global Financial Crisis In October 2008, almost three years after stepping down as Chairman of the U.S. Federal Reserve Bank, Alan Greenspan, also known as the Maestro, admitted in a Congressional hearing that he had been â€Å"partially† wrong in assuming that lending institutions would act in the best interest of their shareholders (Greenspan 2009), thus deflecting blame for the Global Financial Crisis (GFC) that led to the collapse of dozens of major financial institutions and millions of mortgage defaults, costing the global community trillions of dollars in savings and millions of jobs. Yet it was he, an ex-director of JP Morgan, first appointed by Ronald Reagan, who was instrumental in creating the conditions that made it possible. Greenspan approved bank consolidation, pushed financial deregulation, advocated a reduction in bank capital reserves and blocked efforts to stop abusive subprime lending (Pearlstein 2013). Finally, when presented with warning signs of an impending disaster by fellow Federal Reserve Board members just before the GFC, he dismissed them and instead drew conclusions best described by Lord Adair Turner’s words (2010) â€Å"Panglossian, that is blindly or naively optimistic†. Greenspan did however concede during his congressional grilling that there should have been greater regulatory oversight of financial institutions, and it is now universally accepted that this â€Å"light touch regulation† leading up to the GFC materially contributed to the crisis. For people like Lord Adair, who now have the benefit of hindsight, the â€Å"major cause of the crisis† was the fact that â€Å"over several decades prior to 2008, private credit grew faster than GDP in most adv anced economies† and with it, leverage (The Institute for New Economic Thinking 2014). He agrees that the regulators failed, and proposes a new set of policies to â€Å"constrain the growth of private credit† and more importantly to â€Å"influence the type of credit extended† (INET 2014). The generally accepted ultimate causes of the GFC are deregulation of the financial markets; financial innovations; executive compensation; low interest rates; sub-prime loans; and speculation (The Global Financial Crisis 2012, 141).Whilst the changes to the financial sector were driven by ideology, the motivating force behind them was for the most part greed. Neoliberal theories â€Å"advocated policies that aided the accumulation† of wealth in fewer hands arguing that it would create jobs causing wealth to eventually trickle down to all (Beder 2009, 3). They also maintained that â€Å"government intervention in the management of the economy is unnecessary† because the market is self-correcting, an idea attractive to government because it absolved it of responsibility (Beder 2009, 3). The rapid growth of international trade in the 1980’s facilitated global financial liberalisation which made it easier for American banks to argue for deregulation to make them more competitive against foreign banks (The Global Financial Crisis 2012, 141). They found an ally in President Ronald Reagan who had been elected on a platform of limiting the role of government, and they embarked on an unprecedented and expensive lobbying campaign to convince other politicians of the benefits of financial deregulation (Johnson 2012). The first burst of deregulatory bravado came in 1982 with the ushering in of the Garn-St. Germain Depository Institutions Act. Key provisions of the Act like raising the â€Å"allowable ceiling on direct investments by savings institutions in non-residential assets from 20% to 40%† set the scene for the savings and loan crisis of the 1980’s and would later be blamed for thousands of bank failures (Gilani 2009). The ultimate price however, was the undoing of the Glass-Steagall Act of 1933, also known as the Banking Act of 1933. Among other things, the Act governed banks’ domestic operations; separated commercial and investment banks; and established the Federal Deposit Insurance Corporation (FDIC), thus ensuring bank deposits and giving the Federal Reserve greater control (The Chronology of Bank Deregulation n.d.). In 1987, Alan Greenspan took over the chairmanship of the Federal Reserve Board, and his free-market philosophies would champion the deregulatory movement (Gilani 2009). A year later, in 1988, the â€Å"Basel Accord established international risk-based capital requirements for deposit taking banks† that would require lenders to set aside reserves (Gilani 2009). Conversely, marketable securities would only require minimal reserves, which allowed unscrupulous banks to free up reserves by shifting from â€Å"originating and holding mortgages to packaging them and holding the mortgage assets in a now-securitized form†, thus severing the link between asset quality considerations and asset liquidity considerations (Gilani 2009). Greenspan asserted that bank deregulation was necessary for banks to become global financial powers, and by using his own powers, Greenspan set out to dismantle the Glass-Steagall Act firstly by allowing banks to deal in debt and equity securities, and finally by allowing banks to own securities firms (The Chronology of Bank Deregulation n.d.). The final demise of the Glass-Steagall Act came when Citibank was bought by Travelers, a deal which under the Act was illegal. It was then made legal when the Gramm-Leach-Billey Financial Services Modernisation Act, bulldosed through by Senator Gramm, was signed into law by Bill Clinton and at once doing away with the Glass-Steagall Act (Gilani 2009). Senator Gramm who was an economist and free market ideologist, further used his position of power to espouse the virtues of subprime lending by famously declaring â€Å"I look at subprime lending and I see the American Dream in action† (Gilani 2009). Subprime lending or lending to people who would ordinarily have little hope of obtaining a loan, thus came to be looked upon favourably by politicians as it allowed record numbers of consumers to purchase a home (The Financial Crisis and the Great Recession n.d., 337). A direct outgrowth of easy lending, its roots can be traced to the Technology Bubble of the late 1990’s which had been encouraged by the loose money policies of the Federal Reserve under Alan Greenspan (Bello 2008).When the bubble burst and sent the U.S. into recession, Greenspan tried to counter it by lowering the prime interest rate to a historical low of 1% (The Financial Crisis and the Great Recession n.d., 338). This in turn encouraged another bubble: the real estate bubble (Bello 2008). â€Å"Driving the demand for subprime loans was the development of a culture of entitlement† and the U.S. government’s push of home ownership as an inalienable right (The Global Financial Crisis 2012, 145). Th is combination of low interest rates and high levels of liquidity facilitated higher risk taking and speculation. Caution was often equated to lack of optimism so even the most cautious were driven by herd mentality into the market, even in the face of continuously rising house prices (The Global Financial Crisis 2012, 146). Financial wizards were in the meantime designing ever more complex financial products. Initially meant to â€Å"manage risk and make capital less expensive and more available†, they ironically ultimately led to the GFC (The Global Financial Crisis 2012, 142). Loans were bundled in a process called securitization, and sold globally to others who had no direct interest in the customers’ ability to repay the loans. In the process, vast amounts of money were made available to borrowers leading to more loans and further driving house prices up. Credit Derivatives, essentially bets on the credit worthiness of a particular company were used to transfer risk away from the banks leading to even more risk taking on the part of the banks (The Global Financial Crisis 2012, 143). Huge executive salaries and compensation packages played a major role in the creation of the GFC. Tied to short-term performance, they further encouraged risk taking, relaxing of lending criteria (The Finan cial Crisis and the Great Recession n.d.,340) and even accounting fraud as in the case of Enron, Global Crossing and WorldCom (The Global Financial Crisis 2012, 144). The proliferation of subprime lending was responsible for doubling the mortgage borrowing in the U.S. from an annual average of $500 billion in 1998 to over $1 trillion in the 2003-6 period (The Financial Crisis and the Great Recession n.d., 341). When mortgage repayments became more difficult in 2006, a wave of subprime foreclosures ensued creating a glut in the market and dramatic drop in house prices (The Financial Crisis and the Great Recession n.d., 341). The rest is history. Banks deemed â€Å"too big to fail† failed, and trillions of dollars were lost. In the U.S. alone, 3 million homes were foreclosed and 9 million people lost their jobs. In his congressional testimony, Alan Greenspan basically testified that he thought he could trust bankers and credit rating agencies to do the right thing by their shareholders and price risks accordingly, but with such huge profits to be made, it appears that greed triumphed. Considerable evidence has in fact mounted since the GFC to show that his vision of the markets and organisations â€Å"is not only oversimplified, but utopic† (Turner 2010). Critics and many economists now blame Greenspan for the crisis. Indeed, it is clear that notwithstanding his faith in others, it was incumbent upon him as the steward of the world’s largest economy to be vigilant. â€Å"You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others,† said Representative Henry A. Waxman of California, chairman of the committee (Andrews 2008). â€Å"Do you feel your ideology pushed you to make decisions that you wish you had not made?† Mr. Greenspan conceded: â€Å"Yes I’ve found a flaw† (Andrews 2008). 2.0 Stress Scenarios and Credit Modelling When credit is extended by a lender to a borrower, there is a certain risk that the borrower may default on its payment, thus causing a loss to the lender. If the losses are large enough, the lender may be forced to default on its own obligations to others, as seen during the most recent Global Financial Crisis (GFC) which saw a number of large banks file for bankruptcy. To minimise the probability of the borrower defaulting, banks adopt lending practices and ratios, and conduct a review of the borrower’s ability to repay the loan. Competitive pressure from other banks to make credit more affordable means that banks have to try as best they can, to estimate the probability of defaults and the size and nature of possible losses, and make provision for them. The banks’ credit is mathematically modelled, which is then used to estimate the likely outcomes produced by different hypothetical but realistic and potential scenarios. Credit models can be divided into two groups: credit risk models and credit growth models. A credit risk model is used to predict the main credit risk parameters, particularly the probability of default. Conversely, a credit growth model is used to estimate the growth in bank portfolios and to estimate the growth of the bank’s risk-weighted assets, that is, the bank’s off-balance-sheet exposures weighted according to risk and hence the capital requirement as explained in the Basel Accord. A bank’s ability to withstand the most adverse conditions is tested by carrying out a so called â€Å"stress test†, whereby extreme values for certain variables are used in the bank’s credit model to predict the outcome. Most commonly, the stress test is applied to credit risk as this carries the most important and most serious consequences for a bank. The Banking Committee on Banking Supervision (BCBS) (2009, p.1) states that stress testing is a vital risk management tool employed by many banks â€Å"as part of their internal risk management and, through the Basel II capital adequacy framework, is promoted by supervisors†. The rigorous stress testing program requires management to adopt a forward thinking mentality and create â€Å"what if† scenarios that are extreme, but plausible. Thus the purpose of such an exercise is to assess a bank’s resilience to potential adverse shocks in the financial economic environment that may have a catastrophic effect on the institution or financial system as a whole. For example, a modeller may measure the effect rising interest rates has on home loan defaults. A mathematical formula can then be derived to link the two factors. As well as being a supplementary tool for other risk management approaches, stress testing provides management with an indication of the â€Å"approp riate level of capital necessary to endure deteriorating economic conditions† (BCBS 2009, p. 1). Since the GFC, stress testing of banking systems has been used more extensively and in a broader variety of contexts. The internal risk management exercises within the Basel II capital adequacy framework has led many financial institutions and supervisors to focus attention on stress tests in relation to credit risk as an additional way to test the reliability of the internal models they adopt (Schechtman and Gaglianone 2011). The increasing need for financial stability within today’s economic environment, and its role as a policy goal of central banks, has also promoted interest in macroeconomic stress testing and the link it has to credit risk (Schechtman and Gaglianone 2011). There are two broad types of stress scenarios: The reduced-form stress scenario and the sharply contrasting structural stress scenario. According to Roger Stein from Moody’s Research Labs (2011), these terms have been adopted from the credit modelling literature, and are the two main approaches used to model credit risk. A structural scenario possesses a â€Å"causal, economically intuitive relationship† (Stein 2011) between a firm’s asset and the probability of it defaulting, that is, it has a clear and logical economic rationale for the effect of a particular factor on a portfolio. It is focused on the state of the economy, as described by the macroeconomic factors involved and requires a definite link between asset behaviour and the stress factor. Because different asset classes within the portfolio are dependent on the same common factors, there is also a very high coherence or consistency of results between them. Unlike other models, the structural model can explain why a company or a bank, for example, is likely to default. Although intuitive, structural stress scenarios make high demands on the testers because not only do changes in the economic factors have to be consistent throughout the different asset classes, but the resultant asset behaviour must also be fully described by the mathematical function linking the assets to the economic factors. Because of this, few structural models for stress testing have been developed so far. One such model is at the core of the Bank of England’s stress testing agenda. Generally, structural models are useful from a central bank’s perspective as they assume a linear relationship between macroeconomic factors and credit risk, hence providing a way of estimating financial stability risks. In contrast, a reduced-form scenario focuses on the state of the assets and treats default events as â€Å"surprises†. It does not provide an economic cause for the resulting state of the assets, thus only requiring the stress tester to define the asset behaviours themselves (Stein 2011). Modelling credit risk under this approach requires no assumptions to be made concerning why defaults occur. Instead, the dynamics of default are directly linked to the default rate. Default in the feduced form stress model is an unforeseeable event which will always have a positive default probability. A relationship between assets is not required in the reduced form, nor is a logical reason given for a certain observed effect. Because of their less rigorous demand, reduced form stress models are used predominantly in the financial industry. For example, the stress testing approach used even by the Bank of France is based on a reduced form of the credit risk model wherein a borrower’s ability to repay his loan is found as the difference between the value of the assets and that of his loan, and default occurs when the value of the debt exceeds the value of the loan. Credit risk is one of the most important areas for stress testing since it ultimately affects a bank’s profits and even its solvency. When used in conjunction with credit models, both the structural and reduced-form stress scenario approaches assist management in providing a means of mitigating â€Å"risk by enabling intuitive interpretations of states of the world that may cause a portfolio or organisation to experience high losses† (Stein 2011). Stein (2011) states that it is indeed this â€Å"intuitiveness that makes stress testing useful in evaluating a credit model’s behaviour in general, and the appropriateness of a model’s linking functions in particular†. Both the Structural and the Reduced-form Stress Test models have found an important and useful role in the financial industry. Modellers will use either one depending on what is being tested and what is known or can be quantified. As it is, even though the credit models used by their very nature do not perfectly represent the real world, the stress tests applied to them, â€Å"still provide a measure of intuition that is generally otherwise not feasible† (Stein 2011). This is because both structural and reduced-form stress scenarios induce a connection to both the credit models and the risks in the portfolio which provides management with insights into both the model’s behaviour and also the drivers of the portfolio’s credit risk (Stein 2011). (http://www.cnb.cz/en/financial_stability/stress_testing/stress_testing_methodology.html). Referenced: Ricardo Schechtman and Wagner Piazza Gaglianone 2011 – Macro Stress Testing of Credit Risk Focused on the Tails http://www.bcb.gov.br/pec/wps/ingl/wps241.pdf STEIN 2011 – The Role of Stress Testing in Credit Risk Management BCBS 2009 – Basel Committee on Banking Supervision Breuer, Jandacka, Rheinberger Summer 2009 – How to find plausible, severe and useful stress scenarios

Effects of Child Abuse on Psychological Development :: Effects of Child Abuse on Behavior

Most people do not know how to cope with abused children. I became interested in this topic because when I was a teenager I had a friend who was abused by her stepfather and I didn’t know how to help her. I would like to know how children’s psychological development is affected, and how we can help these children cope with their misfortune. The most common effect is that maltreated children are, essentially, rejected. These destructive experiences impact on the developing child, increasing the risks for emotional, behavioral, social and physical problems throughout life. The purpose of this paper is to outline how these experiences may result in such increased risks by influencing the development of the child’s psychology. Psychological Development Child abuse is not a new problem. Each year in the United States alone, there are over three million children who are abused or neglected by their parents or caregivers. Many are brutally beaten and permanently injured. Child abuse has been a problem that has existed through out history and in recent years many researchers have begun dealing with this issue. There is a variation among researches on their approach to the topic. Child abuse is not only the mental or physical injury it is also sexual. These kinds of abuses harm the child’s mental and physical health. The emotional and psychological effects of maltreatment may be far more harmful to the well being of the child than the apparent physical injury. Many studies indicate that abused children are at increase risk of becoming like their parents and repeating the abusive pattern of child rearing to which they were exposed (national committee for prevention of child abuse 1983). Background Child abuse and neglect has recently become the focus of attention of all prevention centers and organizations for children care. Mistreatment of children has existed through history. Children are unable to protect themselves of physical abuse. They have been abandoned, terrorized, beaten, killed and sexual abused. A major portion of the literature of my review focused on child abuse has dealt with the personality characteristics of the abusive parent and the abused child rather than focus on the psychological damage sustained by the abused child. When we think of a â€Å"family† in a typical setting around the fireplace we may picture a beautiful and calm environment where everything is perfect. The reality here in this domestic tranquility is when we realize that the concept of â€Å"family† is the most frequent place of all types of violence (Gelles, 1979).

When is war justified

To fght back out of self- defense is Just and must be done in order to protect one's nation from harm. A well- known example is when America was attacked by Japan at Pearl Harbor. America responded to this attack by bombing Japan and putting an end to this engagement. If America had not responded in this way, then how many more casualties would they have suffered? America's act of self-defense revealed to Japan that they don't want to engage in a war with America and in effect caused Japan to retreat and make peace with America. Humanitarian wars are not Justified because a nation is fighting out of political justice rather than self-defense.The general hope of a nation fighting a humanitarian war is that the death and destruction inflicted by the war will be less than the death and destruction from not going to war. However, humanitarian wars usually cause lots of death and destruction which ultimately causes a nation to look back at themself and wonder, â€Å"Was it worth all the lives we lost in battle? † The Vietnam War is a common reminder of a Humanitarian War that caused many eople to look back and wonder if it was worth it. Imagine if you were chosen to fight in the Vietnam War.The thought of losing your life in a war that was fought out of national liberation would be terrifying to most. In the book, The Things They Carried, the chapter â€Å"On the Rainy River† is the perfect examination of a young man who has been drafted to fght in a war that has no clear explanation. The young man wonders how a nation can go to war and sacrifice lives without any undeniable Just cause. The young man, Tim O'Brien, thinks aloud to himself and says, â€Å"It seemed to me that when nation goes to war it must have reasonable confidence in the Justice and imperative of its cause.You can't fix your mistakes. Once people are dead, you cant make them undead. † We all know that hundreds of thousands of American soldiers lost their lives in the Vietnam Wa r, but for what cause? The loss of their lives cannot be justified undeniably, therefore proving the point that Humanitarian Wars are unjust. Throughout history it is clear that the loss of lives in a war is inevitable, but the sacrifice ot lives in a war that is tougnt to protect the nation is always Justified when e look back at it while the same cannot be said of Humanitarian Wars.Jake Petroff reviewed my original essay and provided me lots of feedback that aided me in creating my final draft. He told me that I needed to provide more evidence to back up my argument and I did by providing texts from various pieces of literature. Jake also enhanced my knowledge of the Vietnam War by telling me facts about the war that I didn't know prior to my conversation with him. Thanks to Jake's feedback, I have been able to further my essay and create my final draft.

Islamic Banking

Islamic Banking In simple terms, Islamic banking is a banking system that functions according to the guidelines laid down by the Shariah (Islamic law). â€Å"Islamic banking is banking based on Islamic law (Shariah). It follows the Shariah, called fiqh muamalat (Islamic rules on transactions). The rules and practices of fiqh muamalat were incorporated from the Quran, the Sunnah and other secondary sources of Islamic law† (Banking Info par.1).Advertising We will write a custom assessment sample on Islamic Banking specifically for you for only $16.05 $11/page Learn More There are two basic principles on which the whole Islamic banking is based on. The first one is that in a partnership firm if the partners are ready to share the profits they should be ready to share the losses as well. In Islamic terms, this principle is called Mudharabah. The second principle prohibits the account holders to either pay or receive interest (Riba) on money borrowed or lent respectively. The Islamic banks also follow these principles in their own transactions. One might think that if no interest is to be given or taken then how the Islamic banking functions. Well, for this problem there is a solution in the Islamic banking system that the borrower can pay an amount (as agreed upon by the two parties) to the lender as a benefit. Now, since the Islamic banking is based on the Shariah, all the transactions are bound to follow the Islamic moral codes of conduct. As such, there is a prohibition to investments or doing businesses engaged in intoxicating products such as alcohol, games such as gambling and foods such as pork. Historical context of islamic banking The past of Islamic banking may be better understood if it is explained in two different parts; first, when there was only the idea of an interest-free banking and second, when the idea was conceived into being by some private inventiveness is some nations and by the government initiative in some others. The earl ier scholars (in 1950s) promoted the idea of interest free banking and called it the Islamic banking system. The ensuing two decades witnessed further interest among people towards this kind of banking. The advent of 1970s witnessed the participation of institutions in this sector. â€Å"Conference of the Finance Ministers of the Islamic Countries was held. The involvement of institutions and government led to the application of theory to practice and resulted in the establishment of the Islamic banks† (Hannan par. 10). Owing to the efforts of the conference attendees, Islamic Development Bank (IDB) came into being in the year 1975.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More ‘The Islamic Banker’ claims that, â€Å"The first model of Islamic banking system came into picture in 1963 in Egypt. Ahmad Al Najjar was the chief founder of this bank and the k ey features were profit sharing on the non-interest based philosophy of the Islamic Shariah† (The Islamic Banker par. 3). Also, â€Å"In 1974, the Organization of Islamic Countries (OIC) had established the first Islamic bank called the Islamic Development Bank (IDB). The basic business model of this bank was based on providing financial assistance and support on profit sharing basis† (The Islamic Banker par. 3). It further claims that, â€Å"By the end of 1970, several Islamic banking systems had been established throughout the Muslim world, including the first private commercial bank in Dubai (1975), the Bahrain Islamic Bank (1979) and the Faisal Islamic Bank of Sudan (1977)† (The Islamic Banker par. 4). 1963-75 1983-84 1985-89 1991-2005 2005 onwards First Islamic bank came into picture in 1963 Iran introduced 100% Islamic banking system In 1985, Fiqh council declared Islamic insurance as Shariah compliant Accounting Auditing Organization for Islamic Fina ncial Institutions (AAOIFI) and Islamic Financial Service Board (IFSB) are established in Malaysia for establishing standards Islamic finance is posting double digit growth at global world. The first private Islamic commercial bank, Dubai Islamic Bank, was launched in 1975 Sudan also launched it in the country In 1989, Sudan introduced 100% Islamic banking Table 1: Brief history of Islamic banking Source: www.shariah-fortune.com Table 2: Detailed history of Islamic banking, Source: (Ariff and Munawar 75). The basis of islamic banking and its organs As mentioned earlier in the paper, Islamic banking is based on the principles laid down in the Shariah. The two main pillars of Islamic banking are profit sharing and taking or giving no interest. The process is very simple that a person deposits his/her money in an Islamic bank and the bank in turn gives an assurance of returning the money when required.Advertising We will write a custom assessment sample on Islamic Banki ng specifically for you for only $16.05 $11/page Learn More The depositor can withdraw his/her money from the bank whenever required (within the working hours of the bank). But since nowadays there are ATMs all over, money can be withdrawn whenever required. In lieu of offering services to their clients, Islamic banks charge a certain amount as fee and if the bank considers it feasible the depositors may be offered gift (Hibah) as well. Following are the different organs of Islamic banking: Mudharabah or the profit sharing system. Mudharabah is basically a banking system that involves sharing of profit between two entities. In these two entities, one is the bank and the other may be either an investor or a borrower. There are two ways in which the transaction is carried out. In the first method, the bank acts as an entrepreneur and accepts investment from an investor. In the second method, the bank acts as a lender and lends money to a borrower. In both the cases, the ratio of profit sharing is fixed prior to the commencement of the banking relation or transaction. â€Å"Losses suffered shall be borne by the capital provider† (Banking Info p. 6). Following is a flow chart that depicts the Mudharabah or the profit sharing system followed by Islamic banks: Figure 1: Functioning of Islamic banks Source: www.bankinginfo.com Deferred payment sale system or Bai’ Bithaman Ajil (BBA). Under this system, the buyer of any goods sells the goods and then pays the seller the amount including a pre-decided profit margin. This amount may be paid either as a total amount or in instalments, whatever has been agreed upon. The actual practice is that an entity identifies the goods to be purchased and the bank is requested for a BBA (Bai’ Bithaman Ajil) or deferred payment sale.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The entity assures the bank to buy back the goods from the bank at an increased value. The bank in turn buys the goods and pays the seller. Now the bank is the owner of the goods. Reasonable profit (as agreed upon with the entity) is added to the cost of the goods and the goods are then sold to the entity. Now the entity is the owner of those goods and pays the bank in instalments within a stipulated time frame. Following is a flow chart of the deferred payment sale system followed by Islamic banks: Figure 2: Deferred payment sale system Source: www.bankinginfo.com Murabahah or the cost plus system. We have seen that in BBA, the price at which the bank sells the goods to the entity is inclusive of a mutually pre-decided profit margin. But according to the Murabahah system, the seller (bank) has to make the buyer aware of the actual cost of the goods and the profit added to the cost. This has to be done at the time of making the agreement. Musyarakah or the joint venture system. The Musyarakah system deals with the partnerships or joint ventures. Joint ventures are done in order to make profit but there are times when the joint venture has to face losses. In joint ventures, the parties involved invest in some proportion. The profits in a joint venture need not be shared according to this proportion but the profit sharing proportion can be different and pre-decided. On the contrary, in case of losses, the losses have to borne by the parties involves according to the proportion of their investments. Ijarah Thumma Bai’ or hire purchase system. The Ijarah Thumma Bai’ system usually refers to consumer goods financing, vehicles more commonly. This system involves two different contracts; Ijarah and Bai’. The Ijarah contract is for leasing and renting and the Bai’ contract is for purchasing. Following is a flow chart that depicts the system of Ijarah Thumma Bai’: Figure 3: Ijarah Thumma Bai’ system Source: www.bankinginfo.co m Wakalah or the power of attorney system. The Wakalah system refers to an agency of any product or service in which the agency charges a pre-decided fee for the services being rendered. The agency acts as an agent of the principal party for performing explicit jobs. Qard or interest free loan. The Qard system refers to the loan given by any lender for a specific duration to the borrower without any interest being charged. The borrower has to repay the loan amount within the specified time frame. Even though there is no interest levied in this kind of ending, the borrower can pay to the lender any amount of his/her will but there is no compulsion. Hibah or the gift system. In Hibah system, any entity that has been benefitted from another person or a body may pay to that person or body any amount as a token of gratitude. The following table depicts the principles followed by some of the major countries where Islamic banks function: Country Category Profit and loss sharing syste m Fees or charge based system Fees services system Ancillary system Bahrain Musharaka Morabaha Commission Service charges Qard Hassan Bangladesh Al-Mudaraba Musharaka Bai-Mua’zzal Bai-salam Hire-purchase Ijara Murabaha Commission Service charges Qurd-e-Hasana wadiah Iran Civil partnership Legal partnership Direct investment Modorabah Mozaarah mosaqat Forward delivery Transaction Investment sales Jo’alah Debt trading Hire-purchase Qard-al-Asanah Jordan Mudaraba musharaka Morabaha Commission Service charges Al-qird Al-hassan Wadiah Kuwait Mudaraba Musharaka Morabaha Commission Service charges Istisna leasing Qard-Hassan Malaysia Al-Mudharabah Al-Musyarakah Al-Murabahah Bai-Bithaman Ajil Bai Al-Dayn Al-Ijarah Al-Ijarah Thumma Al-Bai Al-Wakalah Al-Kafalah Al-Hiwalah Al-Ujr Al-Qardhul Hasan Ar-Rahn Al-Wadiah Yad dhamanah Pakistan Mushrika Equity participation and purchase of share Participation term certificate (PTC) Modarabah certificate Rent sharing Mark- up purchase of trade bills Buy-back arrangement Leasing Hire-Purchase Development charges Loan with service charges Qard-e-Hasna Sudan Mudaraba Musharaka Morabaha Ijara Commission Service charges Qard Hassan Tunisia Mudaraba Musharaka Morabaha Taajir Commission Instalment sales Interest free Turkey Mudaraba Musharaka Morabaha Ijara Irara Wa-Iktina Commission Service charges Interest free trust UAE Mudaraba Musharaka Morabahat Service charges Qard Hassan Table 3: Islamic banking principles in different countries Source: as cited at http://islamiccenter.kau.edu.sa Legal and illegal banking practices based in islamic banking Except Sudan, Iran and Malaysia, there are no other countries where Islamic banks have legal cover. â€Å"In general, legislative needs for Islamic banking can be minimized by legislating the Shariah principles and the Shariah restrictions for contracts while leaving practical details for adjudication by the courts† (Tahir p. 8). Tahir further suggests that, â€Å"Registration requirements associated with agreements need to be simplified as the associated costs may impede lease financing. There is also need for special legal cover in order to facilitate and implement Musharakah (partnership) agreements by Islamic banks† (Tahir p. 8). Since the Islamic banking system is governed by the Shariah, the framework is different from the non-Islamic or conventional banks. Since the Islamic banks follow the no-interest policy, the documentation of financial instruments is totally different and as such they cannot be compatible with the non-Islamic banks. The need of the hour is that the governments of countries where Islamic banks are functioning should come out with some legal cover for the Islamic banks in order to make the Islamic banks more sustainable. Only then the Islamic banks will be able to function worldwide. But as a matter of fact, Islamic banks have improved their standards during the years. Anees Sultan claim s that, â€Å"Investments into some Islamic funds are not always 100 percent ‘Islamic’. Some of the terms under which some funds operate state that interest income shall constitute less than a certain percentage of total income, but some interest income is accepted† (Sultan par. 6). One might wonder that if interest is prohibited in Islam, how such instances are occurring. The board members of the Shariah are paid compensation for favouring judgements (Sultan par. 7). â€Å"Also consider the word Sukuk – now used to describe Islamic structured bonds. The word itself has nothing Islamic or religious about it; it is simply Arabic for a promissory note. Likewise, both Murabah and Takaful are just Arabic nouns for various commercial or social activities† (Sultan par. 7). Another action of the Islamic banks that raise eyebrows is their dealings with the commercial or conventional banks. There are some conventional banks that have started Islamic banking branches and in these branches, conventional banking products as well as Islamic banking products are being offered. Now how can one believe that the transactions in such banks would be interest-free? Comparison of islamic banking and conventional banking In some countries, due to the cosmopolitan nature, there are Islamic banks as well conventional banks. These banks perform all the financial transactions as may be expected from a financial institution. The Islamic Financial Institutions support the world economy by providing all the required services. The basic concept of Islamic banks and conventional banks is the same. Both are engaged in providing their customers banking products such as saving and current accounts, fund transfer, safety lockers, international trading, etc. Islamic banks don’t have any objection in performing such tasks because they are not against the Shariah. The main difference between Islamic banks and conventional banks exists in the manner in which funds are mobilized in Islamic banks and conventional banks. By mobilizing funds it is meant the investments and loan disbursements. For the purpose of comparison of conventional banking system and Islamic banking system, we have considered the following two banks: Faysal Bank as the conventional bank and Meezan Bank as the Islamic bank. Faysal Bank First let us know about Faysal Bank. â€Å"Faysal Bank Limited was incorporated in Pakistan on October 3, 1994, as a public limited company under the Companies Ordinance, 1984† (Faysal Bank). The bank is presently engaged in commercial activities and banking products such as deposit accounts, vehicle loans, loans on property, etc. Vision of Faysal Bank: â€Å"Excellence in all that we do† (Faysal Bank). Mission of Faysal Bank: â€Å"Achieve leadership in providing financial services in chosen markets through innovation† (Faysal Bank). Meezan Bank Talking of Meezan Bank, â€Å"Meezan bank Limited, a publicly listed company, is the first and largest Islamic Bank in Pakistan and one of the fastest growing banks in the history of banking sector of the country† (Meezan Bank). Vision of Meezan Bank: â€Å"Establish Islamic banking as banking of first choice to facilitate the implementation of an equitable economic system, providing a strong foundation for establishing a fair and just society for mankind† (Meezan Bank). Mission of Meezan Bank: â€Å"To be a premier Islamic bank, offering a one-stop for innovative value-added products and services to our customers within the bounds of Shariah, while optimizing the stakeholders’ value through an organizational culture† (Meezan Bank). In order to compare the products of both the banks, the following table will be helpful: Meezan Bank Faysal Bank Current account Current account Riba free current account Faysal Sahulat Savings account Savings account Riba free – Rupee saving account Faysal savings acco unt Riba free – dollar saving account FCY saving plus Meezan Bachat account Faysal Mahfooz Sarmaya Meezan Business Plus account Faysal Premium Karobari Munafa account Faysal Moavin Labbaik Saving Aasaan Faysal Market link Rozana munafa plus account Consumer financing Consumer financing Car Ijarah – Islamic Auto finance Faysal Car Finance Easy home – Islamic Housing finance Faysal Home finance Faysal personal finance Faysal Khushaal Kisaan scheme Table 4: Banking instruments of Meezan Bank and Faysal Bank Source: www.scribd.com Now we shall study these different instruments separately. Current accounts: This kind of account is generally for business owners. They may deposit or withdraw amount as many times as they want. But a certain charge is levied on the transactions. Let us now compare the current accounts of the two banks in question: Meezan Bank – Riba free Faysal Bank – Faysal Sahulat Thi s account is preferred by people who want to do banking according to the Shariah and at the same time want to have easy access to their accounts. The minimum balance required for this account is Rs.10000 and has no limit on the number of transactions. The main feature include: Free online access or at any Meezan Bank branch No limit on the number of transactions If a customer maintains an average monthly balance of Rs.1, 000,000, he/she can get free cheque books, pay orders and debit card. The minimum balance in this account is Rs.5000 and as in Meezan Bank, there is no limit to the number of transactions. The main features of this account are: Free online access or at any Faysal Bank branch No limit on the number of transactions If a customer maintains an average monthly balance of Rs.500, 000, he/she can get free cheque books, pay orders and debit card. It may be noted that most of the conditions are same in the current account of both the banks except the minimum balance. Table 5: Current account features of Meezan Bank and Faysal Bank Savings account: Unlike current account, saving account can be opened by individuals and not business organizations. Saving bank offers some interest or profit to the account holder. This kind of account is the most preferred one by people of all genders and age groups because of its simplicity and easy access. Let us now understand the various features of different kinds of saving accounts being offered by the two banks: Meezan Bank Faysal Bank Rupee saving account – Riba free: Following are the main features : Minimum balance is Rs.10,000 Account opened as per Musharakah system Profit calculated and paid on monthly basis An average monthly balance of Rs.10, 000 is a must to avail the benefits. Faysal savings account: Following are the main features: Minimum balance is Rs. 10, 000 Profit calculated on monthly basis but paid twice a year. Meezan Bachat account – Riba free: Following are t he salient features: Based on Mudarabah system High monthly returns Savings may be withdrawn whenever required The least balance required is Rs. 25, 000 Profit is credited on once in a month. Profit given even if the balance is below the balance requirements. Maximum balance limit is Rs.1,000,000 Rozana Munafa Plus: Following are the salient features: Interest calculated on the basis of balance at the end of the day Interest credited on a monthly basis Minimum balance is Rs.100, 000 for individuals Rs.500, 000 for businesses. It may be noted that there are various kinds of saving accounts with both the banks. The reason is that since saving account is a very popular form of accounting among the people and some profit is given to the customers on maintaining credit balance. The income from Meezan Bank saving account is totally Halaal whereas in the case of Faysal Bank it is Haraam as per Shariah. Table 6: Saving account features of Meezan Bank and Faysal Bank Consumer Fin ancing: As the name suggests this kind of financing is for customers who want to purchase some consumer goods. Such goods may include vehicle loan, credit cards, etc. Let us now understand the salient features of this kind of banking instrument in both the banks: Meezan Bank Faysal Bank The salient features include: The amount of financing is on the higher side If the loan is against property (mortgage), then finance is provided to the maximum possible Customers are allowed to make prepayments Nominal processing fees As the instalments are paid, the rental amount keeps on decreasing The salient features include: The limit of financing is up to 80% Financing tenure may be 20 years The processing of loan applications is fast Nominal processing fees The loan may be further enhanced It may be noted that while dealing with loans, Meezan Bank adheres to the guidelines of Shariah whereas, Faysal Bank performs the transactions in a typical conventional banking manner. It is not eworthy that while in Meezan Bank the financing is done on rental basis Faysal Bank charges interest on the landings. Also, Meezan Bank offers only vehicle finance and home finance whereas Faysal Bank offers vehicle finance, home finance, agriculture finance and personal finance. Table 7: Salient features of saving account of Meezan Bank and Faysal Bank The table below will further make us understand the differences between conventional banks and Islamic banks: Conventional banks Islamic banks Conventional banks have been the brain child of human beings and as such their principles and method of working is also manmade. Islamic banks are based on the guidelines of the Sharia and as such there is no interference of human beings in the basic principles of working. In conventional banking the interest rates on investments and loans is always pre-decided and the investor or borrower is aware of the outcome. Sharia law doesn’t allow taking or giving interest. The benefit s on deposits are based on the profit earned from the investment. The lender and borrower are both partners in the venture and have a mutual understanding and bonding of sharing the risks involved. The conventional banks may go to any extent in order to make more profit out of their investments. There are no restrictions on the method they adopt. Even though Islamic banks also try to get maximum benefit or profit out of their investment, they cannot adopt any means that they want. Their actions are governed by the Sharia law and they have to abide by them. Conventional banks do not transact in Zakaat. Islamic banks are service oriented and following the Sharia law, they help people by collecting Zakaat and disbursing the same to the needy persons. Most of the Islamic banks have opened Zakaat collection centres for the trouble-free depositing of Zakaat by people. Islamic banks pay their Zakaat as well. Conventional banks’ main business is earning from the loans to borrow ers. These banks charge compound interest on the loans to borrowers. Islamic banks also give out loans but as per Sharia law, they don’t charge any interest on the loan amount. Instead, they become partners in the business of the borrower. This is the reason that Islamic bank professionals make a viability study of the business that they propose to finance. Loan defaulters are dealt with very severely in conventional banking system. The bank has the right to charge penalty on the overdue amount. They can even charge compound interest on the overdue interest amount. Islamic banks do not have the right to charge any interest from loan defaulters. This is because of the Sharia guidelines. But they can charge some sort of penalty. Such penalties are not kept by the Islamic banks as their profit. This amount is given away as charity to the needy. It is possible at times those Islamic banks may give some discount in case of early payment. In conventional banking, not much impor tance is given to growth and equity. In Islamic banks people’s stake is considered to a great extent. So here the main criterion is to guarantee growth along with equity. There are times when even banks fall short of funds. This happens when some deposits are withdrawn by customers on maturity or even before that. In such circumstances, it is easier for the conventional banks to borrow funds from other banks on interest basis. In circumstances of shortage of funds, Islamic banks do not have the liberty to borrow from any conventional bank. they can borrow money only from Islamic banks and that too as per the guidelines of Sharia law. Since the rate of interest for loans and advances and deposits is always predetermined, the conventional banks do not take much interest in the project that has been financed. The project report is immaterial for them. On the contrary, since Islamic banks become partners with their customers, they thoroughly check the project report and study the viability of the project before lending money. Even after lending the money, they keep a close watch on the performance of the project. In conventional banks the credit-worthiness of customers is very important. On the contrary, Islamic banks give more importance to the projects and their feasibility. Customers’ credit-worthiness is also important but not to the extent of project viability. In conventional banks, the banks are either creditors or debtors with respect to their customers. This is the only relation that they have with their customers. In Islamic banks, customers are not simply creditors or debtors. They are actually treated as partners. Table 8: Salient features of conventional banks and Islamic banks Source: www.scribd.com In addition to the aforementioned points, the statement of the financial positions of Meezan Bank and Faysal Bank are at Appendices 1 and 2 respectively. Instruments of islamic banking Deposits Islamic banks as well as conventiona l banks accept deposits but the difference is in the manner of return on the deposits. While in conventional banking system, the return on deposits is predetermined, in Islamic banks it is according to the Musharaka and/or Mudaraba system. The return on deposits in Islamic banking system is not fixed. Another difference between these two banking systems is that while in conventional banking system the risk is borne by the bank, in Islamic banking system, the risk and reward are both shared by the bank and the investor. In conventional banking, since the return on deposits is predetermined, any excess benefit out of the deposits is for the bank. However, there is a similarity between the two kinds of banking system that for long term deposits the return is higher and for short term deposits, the return is lower. Investments Financing Both the conventional and Islamic banking systems offer loans or credits to business organizations. This is done in order to gain some profit out of th e credit facility being provided. But there is a difference in the terms and conditions of financing in both these kinds of banking systems. Conventional banks disburse loans at a predetermined rate of interest but since the interest is involved, the Islamic banks cannot do so. But it’s not that the Islamic banks don’t offer loans. They do offer loans but then there is no interest factor; the loans are interest free (Qarz-e-Hasna). In Islamic banks loans are given under the profit sharing system. Overdrafts and Credit cards In conventional banking system, the customers are allowed to withdraw cash from their overdraft account or the credit cards. Credit cards may be used either for purchasing goods or for withdrawing cash. The conventional banks charge interest on the amount used under these two schemes. On the other hand, in Islamic banks there is no credit card. The customers of Islamic banks are offered debit cards whereby they can purchase goods or withdraw cash pr ovided there is sufficient credit balance in their accounts. However, Islamic banks do offer credit but that is under the Murabaha system wherein although there is no interest factor but profit margin is added to the amount to be returned. In case of default by the customers to repay the credit availed, conventional banks charge extra amount (penalty) whereas in Islamic banks this is not the case. The defaulters have to make another agreement with the conventional banks for the repayment of the overdue amount with penalty but in Islamic banks this is not possible. In Islamic banks, even if there is any defaulter, the bank cannot charge any excess amount other than the original amount that was utilized by the customer. The only thing that Islamic banks can do in such cases is to blacklist the defaulter and abstain from lending any further credit facility to that particular customer. Leasing Leasing is a banking instrument wherein the Lessee is allowed to use the facility or product f or a predetermined rent. The ownership in such cases may or may not be transferred to the lessee. In Islamic banking system, this is done under the Ijara system. Under Ijara, the ownership is not transferred to the lessee unless the lease term is completed. In Islamic banking system there are certain rules pertaining to Ijara that the banks have to abide by. Firstly, the rent is applicable only after the lessee gets custody of the asset. Secondly, in case of default in rent payment, the banks cannot charge any extra rent but a penalty may be imposed. This penalty cannot be kept by the banks as their profit but it has to be given to some charity. Thirdly, in case there is any major repair required or is going on the banks cannot claim the rent. And lastly, in case of lost of asset, the Islamic banks cannot claim the remaining instalments. It means that the Islamic banks have to bear the ownership risks. Agriculture loans Agriculture loan is of two kinds; short-term and long-term. Sho rt term agriculture loans are required by farmers in order to purchase seeds, fertilizers, etc. The long-term agriculture loans are meant for expansion, purchase of irrigation equipments, etc. It is a usual practice of farmers to return the loan amount once their crops are sold. The conventional banks charge some predetermined interest on the extended loan facility. In Islamic banks, there are different systems for different purposes. For purchasing seeds, fertilizers, banks offer credit to farmers in return of the crops. This is called the Bai Salam system wherein the farmers have to give the agreed quantity of crops to the banks in lieu of the credit facility availed by them. The Murabaha system is for extending credit facility for the purchase of irrigation equipments. For expansion or purchase of further land, the Musharaka and Mudaraba systems come into effect. But in order to avail all these facilities from an Islamic bank, the farmers have to convince the bankers on the viabi lity and profitability of their farming venture. Housing finance Housing finance is the best form of financing for any financial institution whether it is a conventional bank or an Islamic bank. But as mentioned earlier, there is a difference in the terms and conditions of financing in both the banking systems. In conventional banking system, housing loan is offered on a predetermined interest rate whereas in Islamic banks the housing finance is offered according to the reducing Musharaka system. Under the reducing Musharaka system, the house to be financed is purchased by the bank and the customer as joint owners. The bank then offers its share in the property to the customer for a predetermined rent. The share amount of the bank is segmented into small amounts and the customer has to pay this amount along with the rent to the bank as instalments. As the customer keeps on paying the instalments, his/her share or stake in the house keeps on increasing while that of the bank keeps on decreasing. When the last instalment is also cleared by the customer, the bank has no claim over the house and the ownership of the house is transferred to the customer. The good thing (beneficial for the customer) in house financing according to the reducing Musharaka system is that if by chance there is any devaluation of the property, the customer doesn’t have to bear the brunt alone. The bank will also share the loss according to its share in investment. Advantages and disadvantages of islamic banking The following table depicts the advantages and disadvantages of Islamic banking: Advantages Disadvantages The most important advantage in Islamic banking is that there is risk sharing between the bank and the customer. Businesses dealing in products and/or services that are considered Haram in Islam are not dealt with. More importance is given to productivity instead of credit worthiness. Since interest is also Haram, Islamic banks cannot lend money to other banks. T hey cannot also borrow money from other banks because it involves interest. No interest is charged on loans. Since no penalty is levied on defaulters, the banks are at a loss. Deals with only those businesses that are within the permissible limits of the Shariah law. Exporters have to suffer because in Islamic banks, forward booking of currency is not allowed and in case of devaluation of currency, the exporters end up in loss. Since the loans and advances are done on a profit sharing basis, there are a number of ways in which the agreement can be made. So there is no set standard of format. On the Islamic banks’ part, they have to be satisfied with a very nominal amount on bills discounted by them. The banking transactions in Islamic banks are governed by moral standards that have been laid down by the Shariah. Islamic banks always try to get better deals for their customers’ investment because they want to give them better profit on their investments so th at more customers are attracted towards the banks. In this competition banks try to outperform each other and the ultimate beneficiary is the customer. Table 9: Advantages and disadvantages of Islamic banking Economic crisis and islamic banking The economic crisis has turned out to be disastrous for the financial sector. Banks have started to abstain from lending. This has increased the borrowing rate. â€Å"The value of bonds issued worldwide against mortgages, for example, crashed from $1.9 billion for the year to $500 million in the year 2008†. (Hassan par. 3). The third world countries were the most affected since they had drawn inspiration from the idea of free market. This situation was mostly limited to the conventional banking sector. The Islamic banking sector was not affected much. The reason was that Islamic banks function on a partnership basis with their customers. â€Å"The Islamic economic and financial system is based on a set of values, ideals and morals , such as honesty, credibility, transparency, clear evidence, facilitation, co-operation, complementarities and solidarity† (Hassan p. 4). Such moral conducts provide protection, constancy and protection to the parties involved in the transactions. Also, as per the Shariah, taking or giving interest is not allowed. Also businesses such as gambling are prohibited. All such factors have made the Islamic banking system a reliable source for making financial transactions. â€Å"Beginning in 1998 and 1999, the bank failure rate began to climb again, with a failure rate accelerating in 2008, 2009, and 2012. In 2008, 25 banks were closed. This number jumped to 140 bank failures in 2009† (Amran p. 8). The following two tables will further make us understand the effect of the financial crisis on Islamic banks and conventional banks: Ratios Before crisis During crisis Before crisis During crisis Before crisis During crisis Capital Adequacy Ratio (CAR) Return on Average Ass ets (ROAA) Return on Average Equity (ROAE) Mean 21.075 17.91667 2.996 3.0875 25.296 14.965 t-test 2.3563 -0.073 5.399 p-value 0.01903 0.4715 0.000108 t critical (one tail) 1.7958 1.7958 1.7958 Liquid Assets / Total Assets (LA/TA) Cost to Income Ratio (CTI) Equity / Total Assets (E/TA) Mean 26.7 22.29 36.616 38.9 16.35 13.79 t-test 1.3172 -1.00125 2.6883 p-value 0.107265 0.1691 0.01054 t critical (one tail) 1.7958 1.7958 1.7958 Table 10: Capital Adequacy Ratio (CAR) of Islamic banks before and during the financial crisis Source: www.businessperspectives.org Ratios Before crisis During crisis Before crisis During crisis Before crisis During crisis Capital Adequacy Ratio (CAR) Return on Average Assets (ROAA) Return on Average Equity (ROAE) Mean 15.275 15.325 2.348 1.169 17.77 7.2025 t-test -0.0529 3.648 2.619 p-value 0.479 0.001915 0.0119 t critical (one tail) 1.7958 1.7958 1.7958 Liquid Assets / Total Assets (LA/ TA) Cost to Income Ratio (CTI) Equity / Total Assets (E/TA) Mean 24.7 20.08 34.30 35.876 12.17 12.46 t-test 2.256 -0.095 -0.3505 p-value 0.022 0.180 0.366 t critical (one tail) 1.7958 1.7958 1.7958 Table 11: Capital Adequacy Ratio (CAR) of conventional banks before and during the financial crisis Source: www.businessperspectives.org From the aforementioned tables it may be concluded that the Islamic banks performed better than their conventional counterparts before as well as after the crisis. After analyzing the different ratios it makes us understand that the Islamic banks had greater profitability as compared to the conventional banks. Islamic banking is the solution to economic problems If all the banks follow the guidelines of the Shariah, financial crisis can never happen. For example if the conventional banking sector adopts the risk-sharing system of the Islamic banks, there would never be any problem because then the banks will take great care while investing the funds. Likewise the Islamic banks, the conventional banks will also do proper survey before investing anywhere. By investing also means lending money to borrowers. Before lending money to such borrowers, the banks will do a thorough viability study and only after being convinced of the profitability they will offer the financing of the project. â€Å"Islamic banks act as venture capital firms collecting people’s wealth and investing it in the economy, then distributing the profits amongst depositors. Islamic banks act as investment partners for those who need money to do business†. (Hassan p. 4). â€Å"The collapse of leading Wall Street Institutions, notably Lehman Brothers, should encourage economists worldwide to focus on Islamic banking and finance as an alternative model† (Amran p. 9). The success of Islamic banks can be understood from the fact that the number of such banks is increasing incessantly and the amount they are dealing in is touch ing the skies. â€Å"Furthermore, Islamic banking provides a viable alternative to conventional banking and is less cycle prone. The spread of Islamic finance into western markets demonstrates that it is now being treated seriously by regulators and finance ministers† (Amran p. 12). The growth of Islamic banks can be gauged by Thomas Grose’s statement that, â€Å"London now is home to 25 companies offering some form of Islamic financing. BLME is the largest of five wholly Sharia-compliant banks operating in Britain. The first, the Islamic Bank of Britain, opened in 2004, and the number is expected to double within five years† (Grose par. 4). The Islamic banking has become popular because people have started understanding that only Islamic banking system can save them from the severe financial crisis in future. Mr. Adnan Ahmed Yousi, who is the CEO of Albaraka Group, Bahrain, claimed that â€Å"Islamic banks do not rely on bonds or stocks, and are not involved i n the buying and selling of debt unlike most conventional banksIslamic banking is distinguished by the fact that it is prohibited from buying debts under Islamic Sharia law† (as cited by Al-Hamzani par. 3). This is the reason that Islamic banks are unaffected to a great extent by the global economic crisis. So it is advisable for the conventional banks to follow the banking systems of Islamic banks and avoid further and future risks. Network of islamic banks around the world Following is a consolidated list of the main Islamic banks in different countries around the world: Country Islamic bank name Albania Arab Albanian Islamic Bank, Tirana Algeria Banque Albaraka D’Algerie, Algiers Australia Muslim Community Credit Union (MCCU) Muslim Community Co-operative (MCCA) Bahamas Akida Islamic Bank International Ltd. Bank Al Taqwa Ltd. Dar Al Mal Al Islami Trust, Nassau Islamic Investment Company of the Gulf Ltd., Nassau Istishara Consulting Trust, Bahamas Massraf F aysal Islamic Bank Trust, Bahamas Ltd. Bahrain ABC Investment Services Co EC Al Amin Co. For Securities and Investment Funds Albaraka Islamic Investment Bank Arab Islamic Bank E.C. Bahrain Islamic Bank Bsc. Bahrain Institute of Banking Finance Bank Melli Iran Chase Manhattan Bank N.A. Citi Islamic Investment Bank (Citicorp) Dallah Albaraka (Europe) Ltd. Dallah Albaraka (Ireland) Ltd. Faysal Investment Bank of Bahrain Gulf International Bank BSC Islamic Investment Company ABC Islamic Bank ABN Amro Bank Deutsche Bank Rep office Investors Bank TAIB Bank of Bahrain Turk Gulf Merchant Bank Bahrain Monetary Agency Shamil Bank Khaleej Investment Company First Islamic Investment Bank Bangladesh Albaraka Bangladesh Ltd., Dhaka Islamic Bank Bangladesh Ltd., Dhaka Faisal Islamic Bank British Virgin Islands Ibn Khaldoun International Equity Fund Ltd. Brunei Islamic Bank of Brunei Berhad Islamic Development Bank of Brunei Berhad Tabung Amanah Islam Brunei Canada Islamic Co-operat ive Housing Corporation Ltd. Toronto Cayman Islands Ibn Majid Emerging Marketing Fund Al Tawfeek Co. For Investment Funds Ltd. Denmark Faisal Finance (Denmark) A/S Djibouti Bank Albaraka Djibouti Egypt Alwatany Bank of Egypt, Cairo Egyptian Company for Business and Trade S.A.E. Egyptian Saudi Finance Bank, Cairo Gulf Company for Financial Investment Faisal Islamic Bank of Egypt, Cairo Islamic Bank International for Investment and Development, Cairo Islamic Investment and Development Co., Cairo National Bank for Development, Cairo France Algerian Saudi Leasing Holding Co. Societe General Capital Guidance BNP Paribas Gambia Arab Gambian Islamic Bank Germany Bank Sepah, Iran Commerz Bank Deutche Bank Guinea Massraf Faisal Al Islami of Guinea, Conakry Banque Islamique de Guinee India Al Ameen Islamic Financial Investment Corp. (India) Ltd., Karnataka Bank Muscat International (SOAG) Al-Falah Investment Ltd. Iran Bank Keshavarzi (Agriculture Bank) Tehran Bank Maskan Iran (Housing Bank), Tehran Bank Mellat, Tehran Bank Melli Iran, Tehran Bank Saderat Va Maadan, Tehran Bank Sepah, Tehran Bank Tejarat, Tehran Iraq Iraqi Islamic Bank for Investment and Development Italy Bank Sepah, Iran Ivory Coast International Trading Co. of Africa Jordan Jordan Islamic Bank Jordan Islamic Bank for Finance and Investment, Amman Kuwait Gulf Investment Corporation The International Investment Group The International Investor, Safat Kuwait Finance House, Safat Kuwait Investment Co-Dar Al-Isethmar Securities House Lebanon Gulf International Bank, Bahrain Al Barakah Bank Bank of Beirut Luxembourg Faisal Finance (Luxembourg) S.A. Faisal Holding, Luxembourg Takafol S.A. Islamic Finance House Universal Holding S.A. Malaysia Adil Islamic Growth Fund, Labuan Arab Malaysian Merchant Bank Berhad, Kuala Lumpur Bank Bumiputra Malaysia Berhad, Kuala Lumpur Bank Islam Malaysia Berhad, Kuala Lumpur Bank Kerjasama Rakyat Malaysia Berhad, Kuala Lumpur Dallah Al Bara ka (Malaysia) Holding Sdn Bhd Lembaga Urusan Dan Tabung Haji (Fund), Kuala Lumpur Multipurpose Bank Berhad, Kuala Lumpur United Malayan Banking Corp. Berhad, Kuala Lumpur Bank Muamalat Berhad, Malaysia Securities Commission Labuan Offshore Financial Services Authority (LOFSA) Islamic Banking Takaful Dept., Bank Negara Malaysia Mauritania Banque Alabaraka Mauritaninne Islamique Morocco Faisal Finance Maroc S.A. Faisal Finance (Netherlands) B.V. Faisal Finance (Netherlands Antilles) N.V. Niger Bank Islamique Du Niger, Niamey Nigeria Habib Nigeria Bank Ltd. Ahmed Zakari Co. Oman Bank Muscat International Bank Sedarat IUran, Muscat Oman Arab Bank Pakistan Al Faysal Investment Bank Ltd. Islamabad Al Towfeek Investment Bank Ltd. Lahore Faysal Bank Ltd. National Investment Trust Ltd., Karachi Shamil Bank Meezan Bank Limited Palestine Arab Islamic Bank Arab Islamic International Bank (AIIB) Plc Cairo Amman Bank Oalestine International Bank The Palestine Islamic Bank Qatar Islamic Investment Company of the Gulf Ltd., Sharjah Qatar International Islamic Bank, Doha Qatar Islamic Bank SAQ, Doha Russia BADR Bank Saudi Arabia Albaraka Investment and Development Co., Jeddah Al Rajhi Banking and Investment Corp., Riyadh Arab Leasing International Finance (ALIF) Ltd. Faysal Islamic Bank of Bahrain E.C., Dammam Islamic Development Bank, Jeddah National Commercial Bank Ltd., Jeddah Riyad Bank Saudi American Bank, Jeddah Saudi Holland Bank Bank Al Jazira Senegal Banque Islamique Du Senegal South Africa Albaraka Bank Ltd., Durban Sri Lanka Amana Islamic Bank Amana Takaful Limited Sudan Al Baraka Al Sudani, Khartoum Al Shamal Islamic Bank Al Tadamon Islamic Bank, Khartoum Animal Resources Bank El Gharb Islamic Bank Faisal Islamic Bank of Sudan, Khartoum Islamic Bank Western Sudan, Khartoum Islamic Co-operative Development Bank, Khartoum Sudanese Islamic Bank Switzerland Cupola Asset Management SA, Geneva Dar Al Maal Al Islami Trust, Geneva Faisal Fin ance (Switzerland) SA, Geneva Pan Islamic Consultancy Services Istishara SA, Geneva Pictet Cie Tunisia Beit Ettamwil Al Tunisi Al Saudi, Tunis B.E.S.T. Re-Insurance Turkey Albarakah Turkish Finance House, Istanbul Emin Sigorts A.S. Faisal Finance Institution, Istanbul Faisal Islamic Bank of Kibris Ltd., Turkey Ihlas Finance House Kuwait-Turket Evkaf Finance House Asya Finans Kurumu A.S. United Arab Emirates Abu Dhabi Islamic Bank Bank Muscat International (SOAG) Dubai Islamic Bank, Dubai Gulf International Bank, Bahrain Islamic Investment Company of the Gulf Ltd., Abu Dhabi Islamic Investment Company of the Gulf Ltd., Sharjah National Bank of Sharjah HSBC, Dubai National Bank of Dubai United Kingdom Albaraka International Ltd., London Albaraka Investment Co. Ltd., London Al Rajhi Investment Corporation, London Al Safa Investment Fund Bank Sepah, Iran Dallah Al Baraka (UK) Ltd., London Takafol (UK) Ltd., London Barclays Capitol HSBC Amanah Finance ANCIB Islamic Asset Managem ent, Arab Banking Corp. Ireland Al Meezan Commodity Fund Plc., Dublin The Islamic Investment Company, St. Helier MFAI (Jersey) Limited United States of America Abrar Investments, Inc., Stamford CT Al-Baraka Bancorp Inc., Chicago Al-Madina Realty Inc., Englewood NJ Al-Manzil Islamic Financial Services Amana Mutual Funds Trust, State St. Bellingham WA Ameen Housing Co-operative, San Francisco American Finance House Bank Sepah, Iran BMI Finance Investment Group, New Jersey Dow Jones Islamic Index Fund of the Allied Asset Advisors Funds Failaka Investments Inc., Chicago IL Fuloos Incorporated, Toledo OH Hudson Investors Fund Inc., Clifton NJ MSI Finance Corporation Inc., Houston TX Samad Group Inc., Dayton OH Shared Equities Homes, Indianapolis IN HSBC, USA MEF Money, USA Islamic Credit Union of Minnesota, (ICUM) United Mortgage Yemen Islamic Bank of Yemen for Finance and Investment, Sana Saba Islamic Bank, Sana Faisal Islamic Bank Yemen Islamic Bank, Sana Yemen National Investme nt Co., Sana Table 12: Islamic Banks in various nations Source: www.listofbanksin.com Challenges and problems being faced by islamic banks Majority of the Islamic banks are located in Muslim countries. The non-Muslim world is not much aware about Islamic banks and their principles. The Islamic banks are bound by the guidelines of the Shariah law. As such, they have to work according to the Musharaka and Mudaraba systems. It has been observed that the Islamic banks face problems in their functions and the bankers owe these problems to the following reasons: There is a shortage of serious and genuine people who want to do business. People take loans from Islamic banks for the sake of it. Due to the lenient rules of repayment, people approach such banks for loans and advances. There are numerous instances wherein people have taken loan from Islamic banks and haven’t returned because they are aware of the loop holes that no penalty can be levied on them. Within the bank, there is a shortfall of well trained professionals who are well versed with the Islamic banking system. Each one of us wants to do the best in life and so do the banking professionals. Even though Islamic banks are doing well, their business is not at par with the volume of business handled by the conventional banks. And since size does matters, the fresh banking professionals prefer the conventional banks rather than the Islamic banks. They are worried about their profession and future promotions. Secondly, Islamic banking needs professionals who are well aware of the nature of business in their banks. There is a dearth of such professionals. Young graduates do not see any future in the Islamic banking sector. It needs a lot of moral and religious understanding on the part of the employees of Islamic banks. It is very ironic to state that due to the vast advancements in science and technology, young students have ample opportunities that are more lucrative and challenging than being an Islamic bank professional. The professionals of Islamic banks are required to have a greater perspective of the banking industry; Islamic in particular, and at the same time, they have to have a proper understanding of their customers and their projects. There are only limited banking instruments with the Islamic banking professionals that they can offer to the customers. It is a human tendency to go to shops where there is a large variety of things that they want to purchase. Similarly, when a person wants to do banking, he/she will like to have more options to choose from. According to the Shariah guidelines, forward booking of currency is not allowed. So there is always a risk of currency fluctuation. Under such circumstances, the exporters are at a loss and the foreign importers are the beneficiaries. Suppose for example an exporter takes order for a particular item at $100 per piece. During the time of finalization of the order, the currency exchange rate is say $1 = Rs.50. It means that the exporter has agreed on a rate of Rs.5000 per piece. But due to the currency rate fluctuation, the rate may come down to say $1= Rs.45. It means that the exporter has to sell goods at a loss of Rs.500 per piece. This issue sometimes forces business people to opt for the conventional banking system. It’s a normal practice by exporters that as soon as their goods are loaded, they approach their respective banks for bill discounting. In conventional banking, bill discounting is preferred because the banks get good commission and sometimes interest as well on the amount discounted. On the contrary, Islamic banks are bound by the Shariah guidelines and though they are allowed to do bill discounting, they cannot charge any interest and moreover, the charges are also very nominal. In spite of the fact that Islamic banking system has been prevalent for more than 35 years now, majority of the people are unaware of the basic principles of Islamic banking or what exactly I slamic banking is. If the Islamic banks want to prosper, it is very crucial for them to spread awareness among the people about Islamic banking. It is an added portfolio for the Islamic banks to teach each and every new customer about the principles of Islamic banking. Islamic banks are not fully established and are still in the learning and experiencing phase. It is a common practice in Islamic banks to use the short term deposits of their customers for long term financing. This is done because the banking professional are under the impression that certain short term deposits won’t be withdrawn, even on maturity. This belief of theirs sometimes backfires when some of these short term deposits are withdrawn. In such circumstances, the bank has funds problem and as per the banking culture, it has to borrow from some other bank for a couple of days. The banks those are ready to transfer funds don’t do it as a courtesy or a friendly gesture. They charge a certain amount o f interest. Here the problem arises for the Islamic banks since they are bound by the guidelines of the Shariah law and can neither pay interest nor take interest. As mentioned above, most of the Islamic banks do not have the variety of instruments that conventional banks have. Due to the advancement in technology and science, conventional banks have gone far ahead in bringing innovative products for their valued customers. Islamic banks, on the other hand, are banking on the same old banking instruments or products. Moreover, most of the Islamic banks do not have their own research and development department so that they may devise new products. This hampers the progress of Islamic banks to a great extent. In today’s world, advertisement is a must for any product’s success. But ironically, Islamic banks do not do much of advertising and avoid the media to a great extent. Actually, the world should know what Islamic banking is about and for this advertisement or the me dia are the best options. Recommendations It’s not impossible to have solutions for all the problems mentioned above. It’s just a little understanding and initiative that is required. It has to be accepted that the working conditions for Islamic banks will never be the same in Muslim and non-Muslim countries. It’s not that these problems are faced by all the Islamic banks. The Islamic banks in Muslim countries such as the Kingdom of Saudi Arabia, United Arab Emirates, Qatar, etc, are doing quite well. It’s only the newer ones in non-Muslim countries that are facing the major problems. Since the Islamic banks follow the values of Islam in their banking operations, they should also be humble and extend help to the new Islamic banks. At least they can provide feedback, experienced professionals etc. So that the newcomers are not stuck and may perform better and come up to the expectations of the principles of Islamic banking. It should be the endeavour of th e International Islamic Banking Organization, the Islamic Development Bank, and other Islamic banks governing agencies to put more efforts and professionals in the research and development field. I am sure experts on Islam religion must have been employed by such organizations but such experts should have a vast and broad mindset and identify new products for the masses. According to Dr. Salah Al-Shalhoub, head of the Centre of Banking Studies and Islamic Finance (CBSIF), the trend of Islamic banking is changing and â€Å"The Islamic banking system, which used to design products on purely Islamic basis, began to expand these products to meet requirements of customers who felt more secured about their investments, not only in terms of finance but also from the Shariah perspective† (as cited in Arab News par. 9). It’s true but more efforts are required. Like regarding the problem being faced by the Islamic banks due to the bill discounting and booking of foreign currency , the governing bodies can devise some way to overcome the problem. This way they will be able to attract more and genuine customers because as such Islamic banking system is an excellent one and people will prefer Islamic banking if their requirements are met. The Islamic banks, on their part, should hire more professional people who are experts in banks and have the knowledge of the principles of Islamic banking as well. Customer service is very important in any service organization. Customer service doesn’t only mean welcoming the customers and offering them a glass of cold water. The Islamic banking professional should go out of the way and explain to their customers what Islamic banking is all about and how they will be benefitted. The Islamic banks should rely on the media and should have a separate budget for advertisement. After all, this is a kind of business and businesses prosper due to advertisement. This way, two purposes will be served. Firstly, the advertisemen t will spread the awareness of Islamic banking and secondly the bank’s popularity will grow. People will come to know about the specialities of Islamic banking system and will automatically be attracted towards doing business with such banks. Even if initially the business people hesitate to come due to the strict guidelines regarding various products and instruments, at least the banks can garner many customers for their saving bank accounts. Nowadays even children want to open their saving accounts. Gradually, as there will be more innovative products and the banks will have better professionals, it is beyond doubt that Islamic banks won’t succeed. The future of Islamic banks is very bright. Conclusion It has been only 37 years since Islamic banks have come into the banking scenario and as compared to the conventional banks, they are quite new. As such, it is quite early to decide whether or not Islamic banking industry is a success or not. Looking at the response an d feedback that Islamic banks are getting from foreign countries that are non-Muslim it may be understood that the even though slow yet there is some progress. The popularity is increasing gradually. Moreover, the world economists have been quite impressed by the performance of Islamic banks during and after the economic crisis. There have been symposiums and conferences to discuss this issue. The number of Islamic banks in non-Muslim countries is increasing gradually and it is estimated that within the next five odd years, the number will double. There are certain drawbacks of Islamic banks but these are due to the strict guidelines of the Sharia. But if we look at these drawbacks from the Sarah’s point of view, it will be understood that it is actually for the good of the masses. Sharia law doesn’t want to harm anyone due to its principles. Islam doesn’t allow earning money from money. The only ways of earning allowed in Islam through business are trading, man ufacturing, and service oriented jobs. There are restrictions to such businesses also. Certain things cannot be dealt with such as gambling, pork, intoxicating items, etc. If we think optimistically, such guidelines are better for the society as a whole because all malpractices can be avoided by such guidelines. Children learn what they see. If we start following the same path as the Islamic banks and abstain from all those things that are banned according to Sharia law, our future generation is sure to become a decent and civilized and God-fearing one. Then our earth will be a better place to live in. Al-Hamzani, Mohammed. 2008. Islamic Banks Unaffected by Global Financial Crisis. Web. asharq-e.com/news.asp?section=6id=14245. Amran, Muhamad. n.d. Prospects for Islamic Banking after the World Economic Crisis. n.d. Web. http://www5.cuhk.edu.hk/wylf/wylf_media/paper_poster/Economic_07_Muhamad_Nur_Adzim_AMRAN.pdf. Arab News. 2012. Symposium Explores Prospects of Islamic Banking. Web. arabnews.com/symposium-explores-prospects-islamic-banking. Ariff, Mohamed, and I. Munawar. The Foundations of Islamic Banking, Cheltenham, United Kingdom: Edgar Elgar Publishing, 2011. Print. Banking Info. 2009, Your Guide on Basic Concepts and Principles of Islamic Banking. Web. bankinginfo.com.my/_system/media/downloadables/islamic_banking.pdf. Faysal Bank. n.d. Faysal Bank. n.d. Web. faysalbank.com/aboutus.html. Grose, Thomas. 2008. The Rise of Islamic Banking in a Time of Economic Crisis. Web. usnews.com/news/world/articles/2008/12/10/the-rise-of-islamic-banking-in-a-time-of-economic-crisis. Hannan. n.d. Islamic Banking: Problems and Prospects. n.d. Web. shahfoundationbd.org/hannan/article10.html. Hassan, Abul. 2009. The Global Financial Crisis and Islamic Banking. Web. islamic-foundation.org.uk/IslamicEconomicsPDF/Hassan-financialcrisis-if.pdf. Meezan Bank. n.d. Meezan Bank. n.d. Web. meezanbank.com/MeezanBank1.aspx. Sultan, Anees. 2008. As Islamic Banking Grows, so does the Ne ed for Standards. Web. thenational.ae/thenationalconversation/comment/as-islamic-banking-grows-so-does-the-need-for-standards. Tahir, Sayyid. n.d. Current Issues in the Practice of Islamic Banking. n.d. Web. irti.org/irj/go/km/docs/documents/IDBDevelopments/Internet/English/IRTI/CM/downloads/Distance_Learning_Files/Lecture-8_Related_Reading-1_Current_Issues_in_the_Practice_DrTahir.pdf. The Islamic Banker. n.d. Islamic Banking and Economics. n.d. Web. theislamicbanker.com/history_islamic_banking/. Appendix 1 Statement of financial position of Meezan Bank Source: www.meezanbank.com Appendix 2 Statement of financial position of Faysal Bank Source: www.faysalbank.com

Family Structure Comparative Essay †English

Family Structure Comparative Essay – English Free Online Research Papers Family Structure Comparative Essay English We are living in a world where lie many different cultures, surprisingly when we start to compare and analysis different culture toward our own culture; the first thing that we feel is the sense of superior for our own culture. This is what called ethnocentrism, which means the belief that our own cultural ways are correct and superior to others. However in reality, there is no such thing as â€Å"superior† in any culture since every culture has its own advantages and disadvantage. Therefore, the reasonable way to approaches different culture is to combine its advantages and renovate a new way of looking at two different cultures. In this case, we will focus on the advantage and disadvantage on an aspect of a culture. The aspect that we will focus is the family structure between two cultures, Asian’s family structure and Western’s family structure. In the following paragraphs, you will view at both of the families’ structure and find its pros and cons to discover a new way of approaching two cultures. Since I am an Asian person, Asian family structure is a very ordinary matter to me. To illustrate Asian family structure, the words love and respect would be the words I’ll apply to it. In an Asians family, we have a strong sense of respect toward our own elders. Despite this fact, it can influences a negative results; since the elders tend to be more involved in their children’s life and sometimes even make decision for them instead of allowing the children to make their own decisions. As the matter of fact, Asian kids become very protective and dependent toward their parents rather than depending on themselves. Even though, Asian parents might seem to be very strict, we must not forget the true reason behind this wall and this reason behind this wall is love. Through my entire life, I have a very close relationship with my parents. I have always been guided by my parents on how to live my life productively. Generally, I followed their guidance, but sometimes I would ignore their advices and rather do everything my own ways. Yet, as time passes, I realized how much I regret those little advices and suggestions I ignored. The guidance that I should had listened to and converted it into actions instead of throwing it away. In contrast, the western Asia family Ad Closer relation with his or her parents Guidance for their kids since parents have experienced Make the right decision most of the time Disad Strict Parents more involved Parents makes decision More protective In contrast, Western family Ad Individual – out going Have the right to speak up Can rely on oneself Disad By the time u reach 18 you are considered as a adult and u’ll go off and live alone Closer relation to friends instead of family – personality shaped by friends more than parents Make their own decision (sometime wrong) Conclusion Both of these two structures have their own advantage and disadvantage, however if you renovated these two structures together and combine its advantages we would be able to come up with a novel approaches of family structures. Research Papers on Family Structure Comparative Essay - EnglishComparison: Letter from Birmingham and CritoAnalysis of Ebay Expanding into AsiaEffects of Television Violence on ChildrenPersonal Experience with Teen PregnancyThe Relationship Between Delinquency and Drug UseInfluences of Socio-Economic Status of Married MalesHip-Hop is ArtStandardized TestingWhere Wild and West MeetThree Concepts of Psychodynamic

CEO Pay essays

CEO Pay essays STATUS REPORT: WHERE WE STAND ON CEO PAY Recently, in a report on current CEO pay, CEO compensation seems to have become a major issue. In recent years, boards have shifted the mix of executive pay away from cash and toward stock options. Stock options now represent 53% of CEO compensation packages compared to 40% a decade ago. Options averaged $5 million in 1999, up 17% from 1998. Among major firms, 1998 CEO compensation averaged $30.5 million, up 36% from $22.4 million in 1997. That includes salary, bonuses, value of restricted stock and assorted perks, gains from exercising stock options and the 12-month rise in value of unexercised options. According to a 1999 article by Ron Yezzi of Minnesota State University, corporate CEOs in the United States, on average, earn 32 times as much as comparable CEOs in Great Britain, six times as much as those in Japan, and four times as those in Germany. While it may seem initially outrageous for a CEO to make 100 times the salary of a typical worker at the company, some perspective is necessary. Unlike the CEO of a large corporation, the typical worker does not have to make decisions that affect thousands, or even tens of thousands of employees, answer to the stockholders who demand higher profits and higher stock value, grasp all the workings of the corporation and oversee an efficient managing team, and take continual risks to insure the corporations competitiveness in a free market economy. One major factor in the escalation of CEO income is the practice of tying CEO compensation to performance. For example, defenders of Michael Eisners mind boggling compensation point out that he took Disney from revenues of $1.5 billion in 1984 to $18.7 billion in 1996 and that the stock rose from three dollars per share to more than $75 per share during that time. Millard Dexler, CEO of apparel chain powerhouse, Gap, is another example of the relationship betwe...