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  • #46
    Originally posted by elam View Post
    The dilemma is not unique to Islam!

    In the RCC there are three guiding principles drawn from our sacred texts = Acts 4:31-32 "filled with the Holy Spirit...all the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had" & the golden rule of 2 Thessalonians 3:10 “The one who is unwilling to work shall not eat”. The 3rd principle is a quantification of ownership drawn from Acts 5:1-4 = "Didn’t [the property] belong to [them] before it was sold? And after it was sold, wasn’t the money at [their] disposal?".

    It is the last principle that guides my viewpoint concerning the lender/borrower relationship. In my perspective: by advancing "me" a loan (it doesn't have to be money) in preference to other investment options, the lender has forgone some advantage to himself for my benefit. In my view: I am conscience bound to make good that loss of advantage to the lender.

    From a lenders viewpoint they seek yields, not interest! Interest is merely a convenient component for determining yeild. For instance: a lender could buy a share in an enterprise that on average could yield 10% pa on the original investment, but such yields might fluctuate from year to year and even worse, there is no security of either gaining returns or recovery of the original investment. However, a secured loan at a set return gives the lender comfort & security. Thus a lender might be inclined to lend to "me" at a lower yield for the sake of security.

    In Oz, at least since deregulation of the financial markets, this is basically what happens with mortgages. The banks have to retain certain ratios of liquidity and securitisation which makes them inclined to pursue secured loans. Demand for loans is high, and bank funds available for loans is limited, so there is a threat of high interest rates, butOur govts anti-monopoly policy (the four pillars policy = four big banks & a lot of other lenders) ensures competition keeps domestic interest rates low. Also, the threat of re-regulation keeps the banks in check, as does the modern access to global financiers.

    As I contemplated the current global banking system I find that with the elimination of "rogue bankers" the system works! "Rogues" are being addressed via Basel II, but the success of containing "rogue bankers" will depend on the level of corruption in each sovereign nation.

    I found your antagonism regarding the World Bank somewhat puzzeling. I trust you are aware it is the face to five organisations...

    1. The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries.

    2. The International Development Association (IDA) provides interest-free loans — called credits — and grants to governments of the poorest countries.

    Together, IBRD and IDA make up the World Bank.

    3. The International Finance Corporation (IFC) is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments.

    4. The Multilateral Investment Guarantee Agency (MIGA) was created in 1988 to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders.

    5. The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.

    http://www.worldbank.org/

    As I suggested in an earlier post, because of the partisan politics within Islam , sourcing finances for the reconstruction of Syria and/or Iraq, and/or the resettlemnt of refugees, will need to be based on a secular construct. I only know of one organisation that has the resources to facilitate a project that has such an enormous scale = The World Bank!

    In my dreamtime, I have assumed that the finances for my "refugee permanent housing" project have been procured, and expended, and the refugees have been allocated the properties of their choosing. As I suggested elsewhere the issue is how to give them ownership, and thus, how are they going to "pay off" the community debt incurred. I've envisioned an Inter-generational Loan model, which I presume would be most practically implemented via an Equity Banking model.

    I'll expand in the next day or so, once I've consolidated my thoughts...
    wow!...information overload here!
    The RCC guidelines are interesting--particularly 4:31-32---In Islam---all wealth belongs to God, who determines wealth distribution according to his will. Therefore any wealth/property that a human being gains is because of the blessings/grace of God and we are obligated to use it for benefit of all. Both the creditor (loan giver) and debtor (loan taker) are in a win-win because a person with excess money can put it to good use/benefit by investing (for profit) and the one that does not have money can also put it to good use/benefit in business (for profit). When both parties have mutual benefit neither needs to feel guilty about anything. Since transactions are contracts that determine both profit and risk sharing---both the investor and the bussinessperson share the loss and gain as per the contract. This is a much more democratic, egalitarian and just system than the one you described. Your system is biased towards the creditor who has no real risk (since loans have collateral or conditions) and unfair towards the debtor who shoulders an unfair level of risk.

    The Church has had history of some compromise with toxic and/or questionable doctrines? Christianity (or rather Jesus Christ (pbuh)) was against interest right?
    If you say that RCC charity was successful, I am inclined to accept it........Churches (Mosques, Temples...etc) are generally closer to their communities and can tailor to the specific needs and priorities of their communities more efficiently, speedily and flexibly than rigid, slow, bureaucracies/government institutions. They are far better at a bottoms up approach and because they can inspire people to altruism---they can gather volunteers as well as donations and this reduces the cost of reconstruction and gives the community a sense of pride and ownership in the community they have worked so hard to build. This sentiment of ownership and belonging will, in the long run, promote cohesion of the group and a desire to do better. This will bring prosperity---and without any interest laden debt-load, the prosperity produced can be used for more public benefits---which in turn will create more retained income---which in turn will spur the economy because it will increase demand for goods....Its a win-win for everyone.

    In your model WB or other outside investors who go in to make a profit with an interest-based loan have nothing vested in the success of the community or the people they are loaning to---they are simply interested in the "yeild" as you called it---what they can get out of it---once they have made money---they will take their investment and go elsewhere to make more money---meanwhile the people and community will be left with a lot of debt and crippling interest payments that will suck any prosperity out of their community and into the hands of the rich money-lenders. Its a win-lose scenario---and Capitalism is based on this principle---it has been this way since its inception when the Dutch started the joint stock company (The East India Company--the VOC---and took their Guns and soldiers to force "open" trade so they could steal/exploit the resources of others for their own greedy benefit.) (The Portugese and Spanish were just as bad)

    WB sounds good on paper---they claim "noble" goals of improving the "poor" but in reality their policies have caused more harm than good to the poor while making the rich richer....

    In my dreamtime, I have assumed that the finances for my "refugee permanent housing" project have been procured, and expended, and the refugees have been allocated the properties of their choosing. As I suggested elsewhere the issue is how to give them ownership, and thus, how are they going to "pay off" the community debt incurred. I've envisioned an Inter-generational Loan model, which I presume would be most practically implemented via an Equity Banking model.---in other words these "refugees" are simply pieces of junk you--"the grand savior", move around or "allocate" so that rich guys in fancy offices can exploit them for generations to make money off of?.....

    Consider---if YOU were a refugee---would you want your destiny controlled and decided or "allocated" by some stranger in a bureaucracy or by a nameless investor or would YOU want to be empowered to make your own choices about your own destiny and that of your community?

    Comment


    • #47
      Originally posted by elam View Post
      Secularism has its place in the realm of rationality. This necessary detachment was recognised by Muslims scholars during Islam's 300 year golden age (from the rise of Muhammad thru to the mid 13th century). Secular thought prevents "the flat earth" type ideology of the unscientific religious cleric... The golden age is said to have been brought to a conclusion by closed minded clerics such as Abu Hamid Muhammad ibn Muhammad al-Ghazali who advocated that nothing could be known apart from Allah and Islam.

      Taking your definition, I too would be gainst secularization. Another view is that secularization of non-religious institutions removes barriers between resident groups. That is: in secular evironments no distinction is recognised between Sunnis, Shi'as or Kharijites and their offshoots, or for that matter, no distinction is recognised between these Islamic groups, Christians, Jews etc. The person is the subject not their introspection...

      Secularisation therefore requires universalism in ethics.

      By definition Sscularization doesn't promote self-interest, the exact opposite. Its aim is to promote a balanced society = the removal of any prejudices that would alienate one person from another. The ethos is simple and found in the sacred texts of multiple cultures = "Do unto others what you would have them do unto you!".

      Are you against peace, love & understanding? Is it your proposition that worldwide conflict should be perpetuated? Is it your proposition that destruction of people's lives, enforced poverty, inflicted suffering and murderous chaos caused by religious conflict be perpetuated? Is it your proposition that people should be unwilling forced to convert to your mindset?

      I hope that your answers are: No. No. No. No.

      Wiki has it that "Secularization refers to the historical process in which religion loses social and cultural significance. As a result of secularization the role of religion in modern societies becomes restricted. In secularized societies faith lacks cultural authority, and religious organizations have little social power".

      Wiki notes that "Secularization has many levels of meaning". The bit I've underlined is where I depart from their definition. Ostensibly, Oz is a secular state, before the courts, in employment & in the provision of services all people are equal! Our constitution prohibits govt from establishing a national religion and so on. But that said, our lawmakers are guided by Christian ethics...many of our politicians are RCC...
      If we define "secularization" as the distribution of power (which is the type of "secularization" practiced in Islamic governance) then I would be ok with secularization---provided that this distribution of power created an ethical and independent judiciary---which is not the case in the present nation-state system. The elite influence the state which then proceeds to make laws favorable to their profit motives at the expense or exploitation of the "public good". Power is concentrated into the State and there is no counter-power to balance it. In theory---the public can protest---but the state is free to ignore such protests if it chooses and more so if the protests occur on minority issues....

      Taking your definition, I too would be gainst secularization. Another view is that secularization of non-religious institutions removes barriers between resident groups. That is: in secular evironments no distinction is recognised between Sunnis, Shi'as or Kharijites and their offshoots, or for that matter, no distinction is recognised between these Islamic groups, Christians, Jews etc. The person is the subject not their introspection...
      Secularisation therefore requires universalism in ethics.
      ----and I have a problem with this sentiment. I am proud to be a Muslim---I do not want to be forced to give up my values and identity for some myth of a neutral "Universality". It is better to have Plurality where every community is free to live up to its ideals fully---rather than made to compromise to some "Universality" determined by the state. That does not mean that government authority has no role to play---they do have much to do---especially in determining "public good" as well as the security/protection of communities....and other such matters.....

      This neutral universality or "secularization" as you define it---may have had the noble motive of balance and reducing prejudice---but that has been a dismal failure everywhere. White Australia has had harmful relations with its Aboriginals, and in the name of this mythical "universality" has forcefully, almost wiped out the customs, traditions, practices of these peoples....But all over the world a resurgence of excessive (and toxic) religio-nationalism has come about because of the loss of "identity" caused by secularization and globalization. Religions such as the RCC (...and Islam and others...) are global. These religions have the potential to unite large groups of people in a globalized world and they also have the potential to inspire their members towards promoting benefit and reducing harm. I think the best way forward in reducing the toxicity of religio-nationalist sentiments is to bring back ethico-moral values and wisdom teachings embedded in all of our religious traditions....

      Comment


      • #48
        Originally posted by siam View Post
        wow!...information overload here!
        Sorry about that!

        I must try to remember that I've been formulating my ideas for years, and you and I have only been in conversation for a couple of days...even so, your inputs have given me new avenues of thought...

        For instance: I thought on your challenge to the idea of inter-generational loans, but came to the conclusion that the only alternative is passing on a form of defective serfdom to future generations (perpetual rent debt with no guarantee of tenancy). In your terms: its a win for the property owner, and a lose for the tenant! In my proposal it is a win-win scenario which supplements future generations.

        Even in Islam, property owners demand rent returns from their property. It is simple and ancient commerce.

        Charity ultimately has to end somewhere...

        An old Buddhist parable just came to mind:
        A master encountered a student eating his once a day meal (a daily ration of rice, enough for one man).

        The master asked: if a hungry man came and asked you for something to eat, what would you respond? The student smiled with self pride and replied: I'd give him half my bowl of rice.

        The master then asked: if immediately, another hungry man came and asked you for something to eat, what would you respond? The student looked despondently at his bowl and replied: I'd give him what was left in my bowl of rice.

        The master then asked: if on the next day the same two men approached you as you sat down to eat asking for food, what will you do? Before the student could answer, the master asked. And what if this occurred everyday?

        I had a bit of a read up on zakat. An admirable concept, but apart from building Mosques I haven't seen evidence of the practice amoungst the Arab community where I live (Punchbowl is becoming another Muslim enclave). But that said: my Indonesian neighbours and their friends are very open & friendly. In fact, as a older gentleman, they are marvelous to me! When they have a special occasion they indirectly include me by providing me with cakes & other treats ;-}

        Originally posted by siam View Post
        ...Your system is biased towards the creditor who has no real risk (since loans have collateral or conditions) and unfair towards the debtor who shoulders an unfair level of risk.
        If you analyse the western banking system it simply follows the normative practice of the merchant. So, assuming Muhammad was a merchant, who traded for profit, as you previously mentioned, then bankers in that regard have the same ethos as Muhammad.

        As the GFC well demonstrated there can be high risk in banking, especially when "zakat" is forced upon them, as was the case in the USA. Possibly of interest: In the 1990s I was commissioned to do a demographic analysis of loan defaults for a bank. It fascinated me and suprised management that the wealthiest areas had the highest defaults. The poorest, the lowest.

        Originally posted by siam View Post
        If you say that RCC charity was successful, I am inclined to accept it...
        In Oz & as a generalisation I'm glad you accept my witness, but I'm sure you are aware that the RCC is a fraternity and consists of various colleges. The Dominicans are a particular embarrassment...but some communities whom they affected praise them (?)

        Originally posted by siam
        ...the Dutch started the joint stock company (The East India Company--the VOC---and took their Guns and soldiers to force "open" trade...
        And Mohammad used his armies to annihilate any city that would not submit to him!

        Be careful when appealing to history...it can bite both of us...

        Originally posted by siam
        The Portugese and Spanish were just as bad
        You forgot the British! Ah! At least they got rid of the Portugese and Spanish (except for in Macau & the West Indies). Then we had the USA's attempt at colonisation, and we shouldn't forget about the French.

        An amusement: One of the reasons the east coast of Oz got settled by the British was to stop the French claiming the territory.
        http://www.smh.com.au/national/what-...14-12o5na.html

        Originally posted by siam
        WB sounds good on paper---they claim "noble" goals of improving the "poor" but in reality their policies have caused more harm than good to the poor while making the rich richer....
        The WB is multi-tasked. It provides interest free loans to poor countries who can't get credit from elsewhere, and for the more affluent nations it is lender of last resort ie: it evaluates risk and might provide loans to nations when no one else will! So, I think your view is somewhat skewed...

        Just to put things in perspective: I'm not aware of any Islamic nation that provides loans to other Islamic nations who have a high potential for default. I'm only aware of armament exchange. Correct me if I am in error...

        The WB, imo, is based on the french model of libertarianism. You might be interested in this essay on "Equality of Rights"...
        https://www.libertarianism.org/publi...quality-rights


        Originally posted by siam
        Originally posted by elam
        In my dreamtime, I have assumed that the finances for my "refugee permanent housing" project have been procured, and expended, and the refugees have been allocated the properties of their choosing. As I suggested elsewhere the issue is how to give them ownership, and thus, how are they going to "pay off" the community debt incurred. I've envisioned an Inter-generational Loan model, which I presume would be most practically implemented via an Equity Banking model.
        ---in other words these "refugees" are simply pieces of junk you--"the grand savior"...
        No, I'd say that is you looking at a mirror.

        The idea envisioned aims to return to the refugees their dignity and the capability of self-determination rather than a grovelling in thanksgiving for some charity. As for your "the grand savior". Well, that would have to be God. The earthly institution that administers the scheme would merely be a facilitator.

        Today, I was collating my model and reviewing options. One scenario has the beneficiaries providing labour on a barter basis. Have to think through the ramifications, but such a scenario appears to fix one of your objections to "the plan".

        Originally posted by siam
        , move around or "allocate"
        Haven't you noticed that is what Islamic nations are doing in the middle east?

        Originally posted by siam
        ..so that rich guys in fancy offices can exploit them for generations to make money off of?.....
        So you'd rather they & all their prodigy pay rent for all of eternity, so someone else can get fat on the rental income?
        In anycase, you have pre-supposed a scenario which is in opposition to what I have previously stated. That is: the Equity model...

        Originally posted by siam
        Consider---if YOU were a refugee---would you want your destiny controlled and decided or "allocated" by some stranger in a bureaucracy or by a nameless investor or would YOU want to be empowered to make your own choices about your own destiny and that of your community?
        I want what I have asserted is the aim of my imagings = self-determination.

        Somewhere, I am sure I said something about the persons making a personal choice from amoungst the completed properties available for allocation. (Ah! Just saw it on a reread, . You must have missed it! I've highlighted the relevant part of your cite of me in red.

        As is the normal case in large scale urban developments there would be little variety in design in floor plan, so I guess choice would come down to location...landscaping & decoration would be the responsibility of the householder...

        I'm finding you a bit contradictory. You seem to push Marxism on one hand and then rebel against centralised control. My imaginings are only centralised in respect of attracting finance and administering the build. Thats just sensible economics to reduce overheads...

        ____________________

        Please keep in mind that the focus of my imaginings is the financing, construction & distribution of housing for displaced persons on a massive scale (eg: responding to the current Syrian & Iraqi refugee crisis). And provide people with the chance of home ownership and a future beyond peasantry...

        The scope of the envisioned project is to build 500,000, moderm, 1st World standard, 3br & 4br homes, within a 5 to 10 year period.

        Some may doubt that such a scope is possible, but my research indicates that with modern building techniques & materials the construction is possible using either high tech or labour intensive solutions...

        Consider the following:
        https://www.youtube.com/watch?v=GeVYXy9Gq_E
        https://www.youtube.com/watch?v=j1bL_1NBvIc

        ...the main obstacle is raising the massive upfront finance to meet sundry & materials costs. Labour costs could be absorbed through barter...

        In the context of our discussion: massive debt will be incurred and somehow it will need to be repaid! I nominate, whoever occupies the property takes on a proportion of the debt repayment. Which leads to one of two solutions: they pay rent (perpetual debt for generations indefinite) or you give the householder a method of acquiring ownership.
        Last edited by elam; 02-18-2017, 08:08 AM.

        Comment


        • #49
          I agree with you that complete charity cannot give people pride of ownership--so some type of lease-financing where they eventually own their property is a good idea---but it should be for a short period only so that the community has more retained wealth that they can use for public services. Thus volunteerism, charity and lease-financing models all combined would offer a good mix. But housing is not the only issue---people will need micro-finance or other forms of investments in order to build products/industries and markets/services so as to generate wealth. In order to build a sustainable, long term community---the people need to have retained earnings---in economic terms this is important because without wealth generation---wealth distribution cannot happen. So wealth needs to be generated and retained by the households so that they will spend on goods/services ---this spending will build the economy because it will cause money to flow within the community. An economy can become stagnant when excess money collects in the hands of the few---which is what is happening with capitalism.

          That is why there is Zakat. A Muslim gives a pre-determined percentage of their UNUSED wealth (those who do not have unused wealth do not pay) so there is no forcing in this system. This way of redistributing wealth allows money to go to specific purposes of public good (education (schools, uni), health (hospitals, pharmacy), Social benefit systems for the widows, orphans, homeless, hungry etc....) Apart from Zakat, Muslims also have the Sadaqa which is voluntary charity and has no fixed amount or rules for giving. (Zakat is obligatory charity).
          The Zakat system still exists---but I agree with you that it has become inefficient---in this respect Muslims can learn from the Christian Churches. I have often thought that if the money from the Muslims and the organizational abilities of the Churches are combined---a lot of real good could be done for so many in the communities....People would no longer have to rely on their governments to have basic needs met and when the poor and needy are lifted out of poverty---the whole community benefits because the economy grows....when basic needs are met---there is more retained income which means there is more money to spend and this means that there is more demand which then means that more people are needed to produce goods/services and this means more jobs...!!!...

          The Islamic economic system is pro-profit, it is pro-property/asset ownership---BUT it balances wealth generation with wealth distribution---making it a more ethical system. But it also balances power between various institutions so that power is not centralized and this also gives more choices to the people---thereby empowering them.

          I think the Churches, Mosques and other religious institutions could be a good way to balance the power of a centralized state system....if set up properly....and this could happen in those territories where the nation-state system has already collapsed....

          The Prophet (pbuh) did have battles---but these were either in self-defense, or because of the breaking of peace treaty, or because of an act of aggression (such as killing diplomats....) and not for trade---The Arabs were already trading both by land and sea before Islam. The wars between the Persians and Byzantine empires had crippled their economic conditions, partly because of high taxes needed to underwrite the wars....Under the Islamic economic system...taxes were reduced which automatically boosted the economy and with more wealth generated---there was more money in the state treasury for more public works....the same happened in Andalusia---the Visigoths were fighting each other and taxes were high (there were other problems too) and when the Muslims came into Spain---taxes were reduced and Spain flourished....(I am massively simplifying history---to make the point that Ethical Economics really has worked for the benefit of people)

          I am not a Marxist---after all, Marxism also pushes religion to the side as does secularism---I am for Pluralism---A Plurality of power structures will create balance and give people more choices and therefore empower them...But I cannot give you any Modern examples as most Muslim-majority countries today follow the nation-state system which centralizes power.

          "No, I'd say that is you looking at a mirror.
          The idea envisioned aims to return to the refugees their dignity and the capability of self-determination rather than a grovelling in thanksgiving for some charity. As for your "the grand savior". Well, that would have to be God. The earthly institution that administers the scheme would merely be a facilitator.
          "---interesting comment....I will have to reflect on it some more....but even if it were so, there is a big difference between the concept of God as "savior" and some arbitrary human being self proclaiming to be a "savior"...?....

          Comment


          • #50
            Siam, in my eyes, we have established friendship. As far as I can detect: there is not a lot of difference between our perspectives on society - just some slight variation in vantage= a place or position affording a [particular] view of something.

            Originally posted by siam View Post
            I agree with you that complete charity cannot give people pride of ownership--so some type of lease-financing where they eventually own their property is a good idea---but it should be for a short period...

            ...But housing is not the only issue---people will need micro-finance or other forms of investments in order to build products/industries and markets/services so as to generate wealth...

            ...In order to build a sustainable, long term community---the people need to have retained earnings---in economic terms this is important because without wealth generation---wealth distribution cannot happen.
            You must have been educated here in Oz!

            The reason I opted for long term inter-generational loans was to ensure each household has, in the short term, high discretionary income - as much as would be practical. In my envisioned scenario I see demand side economics as the driver for driving local employment (creation of local industry).

            One of my schemes is to have a cashless society, people would earn "credits" (retained purchasing power within the internal economy). To my mind such completely dissolves the black & shadow economies which can undermine societal finances. Also, it should mitigate inflation/deflation/stagflation events. Also, it would indirectly regulate external inputs to the economy that might undermine local employment.

            i know this "credit" idea works! Back in the 1950s & 60s when I was a kid, here in Oz the big department stores issued their own instore currency, which you either bought or borrowed at a discount. This currency was basically an instore credit. It kept you loyal to the store (local market). Modern branded "gift cards" are the closest equivalent I can think of... Also in the same period, actually extending into the 1970s, appliances weren't necessarily bought in stores, door to door salesmen might give you a better deal. They would showcase their wares in your home and if you decided to purchase organise what I remember as TAP. I forget what TAP stands for but it allowed you to take immediate possession of a major appliance and pay it off. In those days that was the only way a family could afford to buy a fridge, washing machine, TV or even a vacuum cleaner.

            I'll have to stop myself from raving away...the thoughts are flooding in and this post will never end...

            In short, for an emerging economy, to promote local manufacture & employment I would curb unessential imports (as Japan & others once did to promote local production & savings), have a two currency system (internal & external = something like China once had to promote consumption of internally produced goods). Also I'd opt for a traditional shopping center = butcher, baker, chemist, grocer, hairdresser, barber, hardware & sundry shops = in the short term ban mega-centers, super barns, malls, supermarkets etc The advantage with the old system is they acted as a neibourhood watch - I couldn't get away with a thing when I was a kid, because all the shop keepers knew me and worse, they knew my mother! Also, having independent shops increases employment opportunities and promotes wealth creation based on personal investment/effort (something I think you see as a need)...

            Oops! I'm about to rave again, so I'll stop at this point...

            If you are interested: ask me about the egg man & chicken man, the bread man & the barrow man...

            Amusing story: A guy I knew who worked for the UN was sent to Latavia (or was it Latvia?) with his family. His wife needed milk. She asked a neighbour, who made a phone call and a few minutes later a man arrived with his goat... That is what I call fresh, natural & home delivered :-}

            A story I think funny from an old-timers viewpoint: Back in 2003ish I was working with a group of 20ish guys. One of the girls was really interested in what Sydney was like when I was her age. One day I was telling her about Campbelltown and how, when I moved there in the 1970s it was still a country town, and when you heard the sound of a cow you knew it was a cow, but later after the cows had gone when you heard the sound of a cow you knew it was just the milk-man pressing his horn! She looked at me looking puzzled and asked: Whats a milk-man?

            Just another occupation lost to prosperity!
            Last edited by elam; 02-19-2017, 01:50 AM.

            Comment


            • #51
              Siam,

              I'm stuck. I've determined a scenario for setting up an "Equity Bank" and its depostor and investment return mechanisms that might work. However, envisioning an equity loan scheme, I am having difficult in formulating a mechanism for someone seeking a loan of funds to purchase a property that doesn't disadvantage the borrower.

              Doing the maths in a rent versus mortgage scenario (see the bottom of this post) the existing Western Banking Model (WBM) works to the significant advantage of the borrower, and to the detriment (rent loss) of the mortgagor. On face value this contradicts your preconceptions regarding the WBM. Maybe there is something wrong with my maths or the presumptions I've based them on (an actual market), but I can't discern any errors...

              --------------------

              Below is a summary of how I project an Equity Debt & Equity Banking system working. In my dreamtime, both ideas are configured to reflect my understanding of current Australian Trust Law, Corporations Law,]Property_law & essential Banking Law & Practice.

              Imo, in essence, property & tort "Laws" exist to arbitrate disputes, or more particularly, prevent volilent disputes! Provided "Laws" are generally beneficial to society (even if detrimental to a particular individual), imo, they are essential to social stability. Thus, as I've worked through various issues, I found myself having to frame my musings within the realms of legalism. Sorry about that...

              In my recent research, I've discovered that "Trust Laws" date back to at least the time of the Romans, but the Romans had no known specific provision in their laws for "Living Trusts" (ie: where the owner of property under trust is still alive).

              In respect of "Living Trusts": though the British Trust Laws, from which Australian Trust Laws are derived, have had an on-going evolution since their implementation in the 13th century, I've read that they initially drew from the Islamic regulations governing the administration of Charitable Donations where property was involved.

              If such is true then you should find my musings acceptable {as is, or with a tweak or two ;-}

              Following is the gist of my ideas...

              --------------------

              First the legal framework of my musings...first principles...

              1. All land is conceptualised as a "Commonwealth*" possession. It is the community's responsibily, through its agents (eg: parliament), to determine and overseer land usage (eg: allocate divisions of land for housing, recreation, hospitality, schooling, retail, wholesale, industrial, prisons, agrarian & environmental use plus set aside vorridors for infrastructure), regulate housing & building standards, provide infrastructure, prevent land degradation and water/air pollution etc.

              Conceptually, the land is held in Trust by the Commounity and administered by its agents (eg: parliament) on behalf of the ultimate owner (ie: God).

              Imo, the essential needs of "the community" must take precedence over any rights of "the individual". For instance: "the community" must have the right to reallocate land use, if such reallocation is for the greater benefit of "the community" or the ecology within which "the community" persists. Thus, "the community" must have the right to disposses an individual of their land/s if such is essential to the greater good of "the community" = due compensation to the landholder is considered an inalienable right, except where the land has laid disued/dormant for a period of time (5 years?) or is undeveloped. In such cases no compensation would be forth coming (including compensation for any monies exchanged in the procurement of the property). This "dispossession" provision is aimed to eliminate property (land) speculators from the market. Use it or lose it would be the golden rule.

              Here in Sydney developers are screaming for the release of more land for housing even though there is a plethora of disused, unused or unoccupied properties near to the CBD. There are also complaints of hight rents and lack of available housing. Why is this so? Answer: the property rights of individual landholders are obstructive.

              There are other issues regarding property (land) speculators and family (land) monopolies that I am still contemplating.


              * In Australia, the term "Commonwealth" means exactly what it sensibly implies "wealth in common". The Oz consitution requires equal distribution of Government Services throughout the nation. Therefore at both a National & State level, affluent communities are obligated to subsidize less affluent communities. Via taxation the same principle is applied to the individual. The principle does not prohibit the rich getting richer or prevent the poor getting poorer but attempts to spread wealth around more equitably.

              2. A second form of trust shadows The Torren's Title System used widely in Oz (and worldwide) to substantiate proper ty (land) ownership. Conceptually, in my model, the property has the status of an independent legal "real" entity, with defined rights. These rights are intended to restrain landowners & landholders in the exploitation of the land. This constraint goes a little beyond "zoning" as practiced worldwide.

              It is envisioned that as landowners have full legal possesion of the land, they are the trustee (steward) of a seconday land trust = an agent of the primary trustee (the community) and therefore have subordinate rights. The landholder may not be the landowner (think leases). If so then a Tertiary Trust must be established. Differentiation must be made between ownership, holding-interests and occupation. Each level would be established by a separate trust deed (think sub-leasing or in computer speak 5th form normalisation).

              The importance of all this in property exchange: the land becomes the sueable legal entity liable for any misdeed, not any individual who "owns" it. The later can be sued for mismanagement, corruption, larcency, embezzelment etc. Thus in a property exchange, the purchaser is encumbered by whatever liens or obligations the property has assigned to it. This idea simplifies existing practices by formalising common law procedural evidence and defining the heirarchy of contracts (trusts).

              3. A third form of trust would be required to handle wills & endowments, the estates of juveniles & other persons deemed to be unable to manager their estate/s.

              --------------------

              The Equity Bank

              Equity banking products could co-exist along side traditional banking products. The consumers' would make the choice of product.

              To attract depositors and other sources of funds (and simplify legalities), the Equity Bank could be setup as a division of a licenced traditional bank and distributed as a franchise (something along the lines of Bendigo Bank's Community Banking Model).

              The principle source of funds available for loaning and the meeting of admin costs would be customer deposits and account fees (where applicable).

              In all probability, additional funds would need to be raised via direct long term loans and/or debenture issues - each would involve fixed "cost of funds" at various levels - but institutional equity investment* might also attract funds. In the franchise arrangement, intial capital is assumed as being a combination of loans & equity investment (see below) by the the sponsoring bank.

              * Institutional equity investment refers to securitisation. In the USA the idea was exploited and led to what the international market referred to as "junk bonds". The USA idea was to package mortgages and sell off the package, in short they created a "lucky dip" full of high risk "opportunities". Institutional investors do see value in the concept but are dubious about the packaging. In the envisaged scenario, the investment opportunity would not be in the form of allotments but all of portfolio. This is an extensive subject so I won't go into detail.

              The "Equity Bank" is envisioned as a private (mutual) unlimited liability institution = the only unit holders would be the deposit holders of qualifying non-trading accounts within an investment cycle (see below).

              Though these unit holders would be liable for the investment costs incurred in the investment cycle, they would benefit from rental income within the cycle plus equity profits that ensue from the movement in AMATs (average 28 day returns over a 52 week period).

              Initially, the sponsoring bank would equalise debts and absorb the excess costs of the franchise. In return the Equity Bank would allocate investment units to the sponsor. These can be contineously rolled over in successive subscription cycles or cashed out.

              Investment units would initially be allocated as 1 unit = $1, but this could be varied for new investments to reflect economic or demand circumstances. For instance: if the unit price increased to $1.05 and a unit holder rolled over an initial investment of 1000 units, the value of the investment would increase to 1050 units (a 5% profit in the current 28 day cycle).

              Equity Investment Deposits

              So how does an Equity Investment Deposit work?

              From a customer's viewpoint: something like a fixed term deposit. However, unlike current banking practice, interest as a fixed percentage of investment is not paid, either periodically or at end of term. Instead, a profit/loss distribution will occur according to a 28 day subscription cycle. Funds deposited outside a cycle would be treated as a pre-subscription. Until the next investment cycle begins, these funds would attract fixed interest as per competitive banking circumstances.

              Essentially the unit holders are guaranteed a fixed rate of return for the 28 day cycle plus a securitisation return (a proportion of rent income earned from mortgages repayments less expenses).

              The fixed rate of return component is a market essential to attract deposits and rokk overs. It would vary according to the amount of funds on loan (the maximum subscription on offer) and thus the rental income received, from which distrubutions would normally be paid.

              Equity profits that ensue from the movements in AMAT (Average Moving Annual Totals) is where the Equity Investment Deposit may have an investment return advantage. Accumulated equity profits over a 52 week period might provide a "premium on returns" in the psychology of investment depositors. For short term depositors: they are offered the periodic chance of a surprise windfall.

              To avoid market hic-ups in Equity Deposit Returns (profits or losses), the Equity Bank may need to reserve some profits to absorb loss periods. The movement in AMAT's (average 28 day returns over a 52 week period) to derive the reported Equity Deposit Return for the current investment cycle is meant to smooth returns to investors.

              Mortgage versus Lease Arrangements

              As a rule of thumb weekly rents are calculated as $100 for every $100,000 of the property value, plos or minus a market loading.

              Mortgages are usually limited to 85% of the property value, though in some circumstances, is is possible to get a mortgage at 95%. Generally, the higher your equity in a property, the less risk you represent to lenders, and this puts you in a better position to negotiate a lower interest rate. Conversely, the higher the risk you are to a lender then the higher the interest rate, plus you will have to contribute to Lender’s Mortgage Insurance and possibly take out insurance against Unemployment.

              Assuming a deposit of 5% on a $526,000 purchase, with a mortgage value of $499,700, attracting a 30 year term @ 4.10% pa, variable rate compounded monthly, monthly repayments & a no fee account, repayments would be approximately $557 per week. Add to this municipal charges (garbage etc) and an allowance for maintence costs you'd be looking at a budgeted amount of around $625 per week.

              Rental for the same property would be around $526 per week, municipal charges & maintence costs inclusive.

              I derived these generalised figures from the internet and was surprised that they are close to what is going in my locale for an average older style 3br cottage on a narrow block. So I'm guessing these figures make a reliable example.

              To keep the following example simple, I'll ignore reality and assume that in a 30 year period there would be no variations to the given values. In the real world, interest rates will fluctuate. Commonly, as interest rates increase, so will rents (the opposite is rarely true).

              First up, in budget terms, there is an obvious $99 weekly variation in cash flow between the two scenarios. That means in terms of immediate cash flow, renting saves $154,440 over 30 years. However, at the end of the 30 year period the renter walks away empty handed after outlaying $820,560 in dead money - monies that go straight into the landlords pocket for reinvestment .

              Interest included in the mortgage repayments over 30 years would be $369,540. Add approx $60,000 for municpal charges and maintence charges plus about another budget amount of $45,760 for periodic decorating & replacement of major fixtures, and that totals $475,300 in dead money. That is a net saving of $345,260 over rent. In short: the householder holder (mortgagee), over 30 years, has only had to expend an extra $154,440 ($99 per week) than he would have paid in rent to attain 100% ownership of the property. Also, he attains intangible benefits such as, for he and his heirs, security of tenure beyond the 30 year debt period. After 30 years his property owner's total weekly budget for the property will be limited to municpal charges & maintenance overheads = ongoing savings at NPV of $557 per week (the previous mortgage amount that now becomes available for wealth creation).

              Analysing the ratios: TBA

              Equity Mortgage & Lease Arrangement

              TBA

              Comment


              • #52
                Overview
                Islamic finance is asset-based and its ethical rules prevent speculation as well as unmerited wealth gains (such as interest), ... many countries have been interested in the system ---however, to gain the full benefits of this ethical system---these countries have found that their existing finance structures and laws have to be changed. The foundational principle of an Islamic "capitalist" economic model is ---no interest---since some countries already had an almost 0% interest rate (ex Japan)---this in itself was not a big hurdle......The Islamic system is/was "free-market" in that it allows anyone to buy/sell---in other words 'institutions" are optional...this frees up the market as a lease-finance institution or banks will have competition from enterprising private investors. This is why there is a debate within Islamic finance industry of how to go about implementing the ethical rules and one is to re-arrange/re-interpret these principles in order to fit the existing Interest-based institutional capitalist system (everything controlled by the state or state affiliated institutions---which means power is concentrated in the hands of a few...but such a system can make monitoring and regulation easier because control is easier. ) or to have an alternative capitalist system with its own laws/rules...and principles...I personally prefer the 2nd option because this will allow others such as Buddhists to come up with their own economic system too---(and they are working on it ....) A plurality of systems will give people more options.

                property ownership....
                If we were to make an ideal scenario---then, for ethical system to be just--we need to find the actual property owners (from among the refugees who fled)...only when the previous owners cannot be found (they may have died without leaving an heir) can the "commonwealth" claim it---otherwise it would be stealing. Thus, any claimed property could be held in a trust (Waqf) until the the previous property owner or his heirs were found. A Trustee rents out assets for a fixed period of time at the end of which the property reverts back to the asset holder. Since the renter does not end up with the asset---such rents could be less than those from other instruments. The developer/investor can pass on this advantage to the renter of his asset/home. This allows people with little means to have shelter and to build savings for future asset purchases or for investments.

                Once the status of the properties become clear---claimed/unclaimed---the developer/investor can negotiate with the owner (private/commonwealth) to own the property. Once title is established---the property can be sold off in asset-sharing or lease-finance instruments. These instruments are not much different from conventional banking instruments---except they have better safeguards (profit/loss sharing) for when things do not go well. The "renter" in these type of contracts retains a portion of ownership he has already paid for....and does not lose the whole of the asset. This means, that should the "renter" have a difficulty--the sale of the (home/property) asset will give him a means of having capital to invest or build another enterprise. A means of preventing people from becoming homeless/destitute is important because only those who have wealth pay taxes---and the more people pay taxes...the more benefits the community gets...

                Type of public benefits...
                There are two types of Public benefit systems---the Public trust (waqf) and the Public treasury (taxes). The Waqf is a charity based system while the treasury is tax based. This combination serves to keep taxes low without compromising the benefits to the community. The more income that is retained in order to make investments and purchases---the more the economy grows. Economic growth automatically increases the communities public funds (gained from taxes) and it also increases both public and private Waqf funds. Private waqfs distribute earned wealth among specified private beneficiaries while public Waqfs give services to those in need. Either way, this allows for more retained incomes...which is a plus for the economy. The side-effect of such a system is that the community does not need to rely on the government (state) for benefits as the public waqfs compete against the public treasury to distribute benefits. This competition helps to balance state power....and gives the community an alternative system to state bureaucracy. In order for the state to retain its legitimacy with the people---it must become efficient and quick to respond to the needs of the people. Also, any corruption in the public Waqf system and the people can appeal to the state for protection. Thus, the biggest winners are the people.

                Trusts in the West---Yes, the Romans had Trust ---but the system was fully developed under Islamic economics and was carried into the West. The Trust has 3 main parties---the founder (settlor), the trustee and the beneficiary. The fiduciary duties are laid out. The concept has a basis in the Quranic idea of Khalifa (Trusteeship) in which humanity is a Trustee of God and the beneficiaries are all of God's creation. If I recall correctly---the British universities were initially founded as Trusts...?....
                The classical Waqf system (both private waqf and public waqf) does have some problems and needs to be tweaked to better fit the needs of today and tomorrow...a common complaint is that it is too rigid.

                The biggest problem in a centralized nation-state model is that waqfs offer an alternative to the people....on the other hand, it can also be a complementary source of public welfare for a state with limited resources....but such a symbiosis will only work if the sate is willing to share power systems.....competing power systems can reduce some of the problems of corruption and inefficiency. The Islamic model (way of life) as a whole uses human nature/human traits to its advantage in its systems approach. But in order for it to work best---the interconnections/intersections between systems has to be understood---the role of governance, judiciary, economics and also education work together to build a society for the benefit of all the people. Secular Modernity has broken down the classical Islamic system so it has to be remade...and there is much diversity of thought on the table at the moment....

                Comment


                • #53
                  Hi Siam,

                  I'm wading through what little doco I've found Islamic banking practices. One comment struck me...
                  The purpose of Islamic finance, as found in practice, is to replicate the economics of the above conventional mortgages while remaining compliant with Shariah.

                  It would also be possible to devise Shariah compliant property finance contracts that had different economics, for example by having the Islamic bank share in any increase in value of the property, but such contracts are uncommon for reasons connected with the bank’s risk management and also due to customer demands.

                  Basically, a constant theme in Muslim discussion groups, reports that only religous fanatics pursue Hallel banking. "They totally screw the first home owner" is a common theme...

                  So far I've confirmed that the "Islamic" system is scewed to benefit the landlord. Whilst, the clerics that certify Islamic banking practice see nothing wrong in using "interest rates" to determine the amount of rent charged to the mortgagee, they are dead set against the idea of "diminishing returns" to the landlord which is the basis of the western model.

                  Anyway, I'll reserve judgement until I have concluded my research. Muslim sources are critical of the existing Islamic system for purely economic reasons. I'm assuming somewhere there is a paper that rationalises current debate...

                  --------------------

                  I'll have to re-name my concpt of "Equity Banking". Currently the term is predominately used in the secondary, reverse mortgage & refinance markets to refer to new loans for equity acquired during the term of an old loan.

                  The scheme I envisage is where a home owner starts off with no equity and accumulates it over time. Which is basically what happens in the western system now, The difference in my scheme to the usual scheme: usually the landlord is excluded from profits realised on the sale of the property during the course of the loan. In my scheme the profits are distributed according to equity holdings.

                  From what I gather, there is hot debate amoungst Islamic clerics regaring equity distributions. Imu, technically
                  the landlord as owner of the property should pocket 100% of profits, but to get past this the bank buys the property, then resells it to the prospective property owner at a significant markup. From what I've read of Islamic literature, this is something like a fixed interest loan, for a fixed period in the western system.

                  Another Islamic scheme, which appently the clerics permit but are not happy about, is where periodically the lmortgagor/mortgagee go through a process of buying & selling to each other over the course of the mortgage.

                  In your post you mentioned that western laws need to be changed to facilitate Islamic practice. That is sought of true: in the UK it is reported that a Muslim mortgage arrangement generates two buy transactions which cause stamp duty & other charges to be incurred twice. These expenses accumulate with every buy/sell arrangement.

                  I'm guessing the clerics interpretation of Islamic law is that the transactions must be as real as "selling barley", and so find paper transactions unacceptable.

                  Possibly, rather than insist on law changes and attempt to impose silliness on a community, where, if Arab tradition was applied, they are received as guests, the clerics should realise that we no longer live in an economy based on 7th century paradigms.

                  It frustrates me when people flay themselves senseless...

                  I just don't understand the whys of the alternative systems so I'll continue my research into murabaha & musharaka contracts and whatever else I discover...it'll take time, but I'm patient.

                  Originally posted by siam View Post
                  property ownership....
                  If we were to make an ideal scenario---then, for ethical system to be just--we need to find the actual property owners (from among the refugees who fled)...only when the previous owners cannot be found (they may have died without leaving an heir) can the "commonwealth" claim it---otherwise it would be stealing.
                  Thats what the Torrens System is all about = who owns the property! When talking about war & displaced persons, finding the owner can be difficult. Most countries have a statute of limitations as concerns missing persons. After x period if the person cannot be found, they are declared dead and the property passes to his/her heirs. If the heirs can't be found, then after a period of time the property is ceded to the community (state, nation, whatever) as common wealth. If the person or their heirs eventually turn up, then they are either reunited with their property or compensation is paid. That is the worldwide agreed system. No theft involved, but a llot of practicality...

                  In my refugee plan I envisage a brand new estate (community). People who return to their previous abode are for practical reasons are excluded from my scheme. I'd assume the UN would provide schemes for reconstruction. My view: it is cheaper to build than repair/rebuild.

                  Originally posted by siam View Post
                  The biggest problem in a centralized nation-state model is that waqfs offer an alternative to the people....on the other hand, it can also be a complementary source of public welfare for a state with limited resources....but such a symbiosis will only work if the state is willing to share power systems.....competing power systems can reduce some of the problems of corruption and inefficiency. The Islamic model (way of life) as a whole uses human nature/human traits to its advantage in its systems approach. But in order for it to work best---the interconnections/intersections between systems has to be understood---the role of governance, judiciary, economics and also education work together to build a society for the benefit of all the people. Secular Modernity has broken down the classical Islamic system so it has to be remade...and there is much diversity of thought on the table at the moment....
                  Worse than a centralized nation-state model is the theocracy model!

                  In my observation, the various world religions' intention of altruism is supplanted by their clerics introspection & nit picking. I think it is an inherent faculty (though often suppressed) of human nature to be willing to do things that bring advantages to others, even if it results in disadvantage for yourself. These days people always think in terms of money, but to me it is the little things that prove my point = like having a conversation with a lonely person when you'd rather be somewhere else.

                  --------------------

                  I'll have to stop for now...

                  Please always remember, the only reason I may not respond to you point by point is because I am adding your thoughts to my mix of thoughts which can make it difficult to briefly give a response = my brain is argiung out the "ifs" and "buts"...
                  Last edited by elam; 02-22-2017, 09:09 PM.

                  Comment


                  • #54
                    elam
                    Since you are interested in the subject why don't I help pointing out the info?

                    If its ok, maybe we start another thread in the Islam section?

                    in the meantime here is info you might find interesting---a critical view of both Islamic and conventional banking
                    https://www.youtube.com/watch?v=P_cVuLpD_rs&t=2s

                    Comment


                    • #55
                      Originally posted by siam View Post
                      elam
                      Since you are interested in the subject why don't I help pointing out the info?

                      If its ok, maybe we start another thread in the Islam section?

                      in the meantime here is info you might find interesting---a critical view of both Islamic and conventional banking
                      https://www.youtube.com/watch?v=P_cVuLpD_rs&t=2s
                      Thankyou for the input.

                      For now I'd rather keep discussion on "Finance" neutral = here in Civics, so I'll defer your offer....

                      Though I may not have a comprehensive knowledge of the arabic terminology or the nitty-gritty of the disputes amoungst the clerics, as concerns the general concepts of halal in finance, I consider that I have gleaned sufficient knowledge to understand the halal market and the consequent constraints on the providers of finance.

                      For instance: In my research I came across an institution here in Oz that had formulated a mortgage offering and had submitted it for halal certification. The product was certified, but there is dissent = funds to be loaned were/are sourced from GE Finance. Because of GEF's business practices, some clerics consider the funds to be haram (but what can you do?). Ultimately, the clerics appear to neither encourage nor discourage the uptake of the product but I'm guessing, advise caution according to conscience. So to the religious there is a catch 22. The institution said way back in 2008 that they were looking at alternative sources of funds. Best I can establish as of February 2017, nothing has changed.

                      That aside. via google I've come across some useful info (mainly from UK). My research was becoming tedious as I went through iterations of searches. Then I came across an Arabic term for a specific loan offering that I hadn't encountered before. Whammo! A mine of info...

                      I'm finding my research most intriguing - especially as a professional systems designer to the Banking & Insurance sector here in Oz (now retired).

                      During my research I have discovered that some of my propositions have been in discussion within both the industry & at the gov't level. in respect of Oz's position in world finance. Indonesia alone has a prospective finance market for Oz of around 255 million customers.

                      Our American friends when they hear the world "Islam" automatically think of the middle east and its conflicts. But they need to be educated that a significant percentage of the 1,703 million practitioners live peacefully in SE.Asia (257 million) mostly in Indonesia (205 million), the 3rd largest democracy in the world! Indonesia is amoungst Oz's closest neighbours, so I think it a good idea to know a bit about them, their customs, traditions & religion/s...
                      http://www.usindo.org/country-info/about-indonesia/

                      Within this framework, and my general research into "Conscionable Banking", I came across a submission to govt by the Bank of Sydney. It is definitely worth a full read...
                      http://www.aph.gov.au/DocumentStore....e-34bd7cc1ee22

                      II. Sharia Banking

                      i. What it is

                      Islamic finance is the term used to describe investments that comply with the principles of sharia - hence the term, Sharia Banking. Standard and Poor’s provide a succinct summary of the five pillars of Islamic Finance as: ban on interest; ban on uncertainty or speculation, ban on financing certain economic sectors, the profit and loss sharing principle and the asset backing principle. However it would be too simplistic to take these as literal and guidance is often sought from sharia scholars as to the interpretation of these principles and interpretations may vary between Islamic schools of thought....

                      IV. Institutional Sharia Banking in Australia

                      The ‘Australia as a Financial Centre: Building on our Strengths (Johnson Report) released by the Federal Government in January 2010 stated ‘the greatest opportunity for Australia in terms of accessing offshore capital pools at competitive rates would appear to be in the area of sharia- compliant wholesale investment products.’ The global market for Islamic finance is estimated to be around $1.3 trillion and it is one of the fastest growing areas of the financial services industry operating in over 75 countries through 300 institutions....

                      Over the years, major banks seemed to have been more opportunistic rather than systematic in their approach to Islamic Finance. The general impression by wholesale investors is it is considered ‘too hard’ especially from a tax perspective. Although not insurmountable, the tax considerations do cover: income tax, capital gains tax, GST, stamp duty and international aspects of the transaction.

                      A considerable amount of work has already been undertaken into the regulatory changes required by the Federal Government involving: Treasury, ATO, Austrade, the Department of Foreign Affairs and Trade; all leading industry bodies: ABA; IFSA, AFMA , CPA, Taxation Institute of Australia as well as the major banks, legal and accounting firms. The recommended approach based on this work was to follow the UK model to ensure parity of regulation between conventional and Islamic finance. In 2011, the Board of Taxation completed a review taking into account the UK level playing field model...
                      Last edited by elam; 02-25-2017, 08:56 AM.

                      Comment


                      • #56
                        Yes---the business is potentially big---and because making a profit is not haram (bad) the model seems attractive to many (non-Muslim institutions) in conventional banking/finance industry. Also---since the rules in Islamic banking encourage solid asset -based business practices which withstand stress cycles better---governments are interested too.....BUT...

                        As I mentioned previously ---Islam and banking seem an oxymoron...to me...
                        Buy/sell should be contracts that should be freely available to all to engage in. Banks/finance institutions monopolize these contracts. If the market were freed up so that individual sellers as well as developers can offer their assets directly to the customers without the bank as an intermediary agent---then prices would actually reflect market supply/demand. As long as the laws do not support such competitive and transparent transactions ---but require asset ownership to be conducted through institutions---it is not really a "free" marketplace.....?....

                        Among majority-Muslim countries Indonesia is large---but in terms of Banking and Finance Malaysia is interesting....also, among Muslim-minority countries, Russia, India and China have large Muslim populations....the demographic and income/lifestyle trends will be interesting to watch....

                        Halal certification---there are 5 major schools of Sharia (law) so certification is not standard. (I personally prefer the plurality) because the differences in methodology of the Sharia schools can produce different results in the rulings/laws. This is most commonly seen in Islamic dietary laws (which itself is a very large market...and projecting to get larger....Australia has been an important player there too....)

                        Another factor to consider---as Dr Mahathir pointed out---is that of fiat currency vs gold/silver backed currency system and "virtual" money (and virtual markets)...
                        Here is a talk about the games the Western finance industry can play with virtual money....
                        (around 15 min---he talks about how some people playing in the conventional market made money out of a "virtual asset" (non-existent asset) and got away with it...)
                        https://www.youtube.com/watch?v=fdMdEsOqqUs

                        Comment


                        • #57
                          Hi siam,

                          I am moving this discussion from the "Civics" campus to the wastelands of the "Economics" campus...I've responded to your post there...

                          Here is a link to the new thread...
                          http://www.theologyweb.com/campus/sh...024#post421024

                          I've also started at the "Economics" campus, what I perceive as a companion thread that I have titled "The Social Capitalist". I anticipate you & other interested persons might also contribute to that discussion...
                          http://www.theologyweb.com/campus/sh...025#post421025

                          Comment


                          • #58
                            Originally posted by elam View Post
                            I grew up in the eastern suburbs (Coogee) so its a bob each way. Though Bondi Junction (Roosters) was easier to get to than Kensington (Rabbitohs Jnr) or Redfern (Rabbitohs Snr).

                            Coogee is home to Union. I lived on the corner of Hill & Bream which gave me site of center field...
                            I'm still trying to figure out League. I grew up on South Africa where it's Union all the way.

                            Now I'm a Waikato Chiefs supporter, and root for the All Blacks. I do support the Warriors when watching League.
                            Be watchful, stand firm in the faith, act like men, be strong.
                            1 Corinthians 16:13

                            "...he [Doherty] is no historian and he is not even conversant with the historical discussions of the very matters he wants to pontificate on."
                            -Ben Witherington III

                            Comment

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