Islamic Finance: An Alternative Finance or an Antidote to the Crisis of Capitalism?

Abstract

Purpose – This chapter shows that Islamic finance does not aim at substituting the conventional financial system, rather it can be used to reform it. It can thus indirectly contribute to its survival.

Methodology/Approach – We first present the peculiarities of the Islamic financial model. We then investigate its prospects: coexistence, integration, substitution? It is the investigation of the strategy and activities of the Islamic banks that allows to address this issue.

Findings – We find that the deliberate strategy is essentially to compete with conventional banks. Consequently, there is a willingness to be part of the conventional system. The study of the Islamic financial system allows to conclude that their emergence serves a purpose. The Islamic financial principles provide a benchmark for improving and reforming the conventional system.

Originality/Value of Paper – The main contribution is to provide a clear answer to the future of Islamic finance, and to present the contribution of Islamic finance to renewal of financial and economic thought.

Citation

Causse, G. (2012), "Islamic Finance: An Alternative Finance or an Antidote to the Crisis of Capitalism?", Barnett, W.A. and Jawadi, F. (Ed.) Recent Developments in Alternative Finance: Empirical Assessments and Economic Implications (International Symposia in Economic Theory and Econometrics, Vol. 22), Emerald Group Publishing Limited, Leeds, pp. 173-196. https://doi.org/10.1108/S1571-0386(2012)0000022014