Theorizing Moves to Financial Innocence

2020 ◽  
pp. 60-75
Author(s):  
Terri Friedline
Keyword(s):  
Behavioral Economics ◽  
Financial System ◽  
Individual Responsibility ◽  
Financial Socialization ◽  
Financial Capability ◽  
Banking And Finance

This chapter explores popular, normative theories that attempt to explain access to banking and finance by focusing on individuals and families. Theories such as financial socialization, development, behavioral economics, and financial capability try to explain racialized differences in access to banking and finance while ignoring the financial system’s calibrations to whiteness. This ignorance makes opaque the forces that wield power and opportunity and reinforces tropes of bootstraps and individual responsibility. Programs and policies built on normative theoretical traditions will not lead to a financial system revolution; instead, they will continue to exacerbate racialized inequality.

Islamic Banking and Finance in Theory and Practice

2005 ◽  
Vol 22 (2) ◽  
pp. 69-86 ◽  
Author(s):  
Abdus Samad ◽  
Norman D. Gardner ◽  
Bradley J. Cook
Keyword(s):  
Financial System ◽  
Primary Objective ◽  
Theory And Practice ◽  
Islamic Banking ◽  
Relative Importance ◽  
Islamic Banks ◽  
Equity Financing ◽  
Banking And Finance ◽  
Financial Products ◽  
Islamic Bank

This paper’s primary objective is to identify the relative importance of various Islamic financial products, in theory and in practice, by examining the financing records of the Bank Islam Malaysia (Berhad) and the Bahrain Islamic Bank. Currently, seven available Islamic financing products are considered viable alternatives to interest-based conventional contracts: mudarabah (trust financing), musharakah (equity financing), ijarah (lease financing), murabahah (trade financing), qard al-hassan (welfare loan), bay` bi al-thaman al-ajil (deferred payment financing), and istisna` (progressive payments). Among these financial products, mudarabah and musharakah are the most distinct. Their unique characteristics (at least in theory) make Islamic banks and Islamic financing viable alternatives to the conventional interest-based financial system. The question before us is to determine the extent of mudarabah and musharakah in Islamic financing in practice. The data are as follows: the average mudarabah is 5% of total financing, and the average musharakah is less than 3%. The combined average of mudarabah and musharakah for the two Islamic banks is less than 4% of the total finance and advances. The average qard al- hassan is about 4%, while istisna` does not yet exist in practice. Murabahah is the most popular and dominates all other modes of Islamic financing. The average use of murabahah is over 54%. When the bay` bi al-thaman al-ajil is added to the murabahah, the percentage of total financing is shown to be 2.68%. This paper also explores some possible reasons why these two Islamic banks appear to prefer murabahah to mudarabah and musharakah.

Banking on a Revolution

2020 ◽  
Author(s):  
Terri Friedline
Keyword(s):  
Financial System ◽  
Student Loan ◽  
Payday Lending ◽  
Student Loan Debt ◽  
Banking And Finance ◽  
Community Benefits ◽  
Neoliberal Capitalism ◽  
Loan Debt ◽  
Community Benefits Agreements ◽  
Consumer Advocates

Technological advancements are poised to completely transform the financial system, making it unrecognizable in just a few short decades. Banks are increasingly using financial technologies, or “fintech,” to deliver products and services and maximize their profits. Technology enthusiasts and some consumer advocates laude fintech for its potential to expand access to banking and finance. If history is any indication, however, fintech stands to reinforce digital forms of redlining and enable banks’ continued racialized exploitation of Black and Brown communities. Banking on a Revolution takes the perspective that the financial system needs a revolution—and not the impending revolution driven by technology. Studying various ways the financial system advantages whites by exploiting and marginalizing Black and Brown communities, Terri Friedline challenges the optimistic belief that fintech can expand access to banking and finance. Friedline applies the lens of financialized racial neoliberal capitalism to demonstrate the financial system’s inherent racism, and explores examples from student loan debt, corporate landlords, community benefits agreements, and banking and payday lending. She makes the case that the financial system needs a people-led revolution that centers the needs, experiences, and perspectives of those it has historically excluded, marginalized, and exploited.

Islamic Banking and Finance in Theory and Practice

2005 ◽  
Vol 22 (2) ◽  
pp. 69-86
Author(s):  
Abdus Samad ◽  
Norman D. Gardner ◽  
Bradley J. Cook
Keyword(s):  
Financial System ◽  
Primary Objective ◽  
Theory And Practice ◽  
Islamic Banking ◽  
Relative Importance ◽  
Islamic Banks ◽  
Equity Financing ◽  
Banking And Finance ◽  
Financial Products ◽  
Islamic Bank

This paper’s primary objective is to identify the relative importance of various Islamic financial products, in theory and in practice, by examining the financing records of the Bank Islam Malaysia (Berhad) and the Bahrain Islamic Bank. Currently, seven available Islamic financing products are considered viable alternatives to interest-based conventional contracts: mudarabah (trust financing), musharakah (equity financing), ijarah (lease financing), murabahah (trade financing), qard al-hassan (welfare loan), bay` bi al-thaman al-ajil (deferred payment financing), and istisna` (progressive payments). Among these financial products, mudarabah and musharakah are the most distinct. Their unique characteristics (at least in theory) make Islamic banks and Islamic financing viable alternatives to the conventional interest-based financial system. The question before us is to determine the extent of mudarabah and musharakah in Islamic financing in practice. The data are as follows: the average mudarabah is 5% of total financing, and the average musharakah is less than 3%. The combined average of mudarabah and musharakah for the two Islamic banks is less than 4% of the total finance and advances. The average qard al- hassan is about 4%, while istisna` does not yet exist in practice. Murabahah is the most popular and dominates all other modes of Islamic financing. The average use of murabahah is over 54%. When the bay` bi al-thaman al-ajil is added to the murabahah, the percentage of total financing is shown to be 2.68%. This paper also explores some possible reasons why these two Islamic banks appear to prefer murabahah to mudarabah and musharakah.

Financial capability: citizens or subjects?

2021 ◽  
pp. 25-44
Author(s):  
Rajiv Prabhakar
Keyword(s):  
Financial Services ◽  
Financial System ◽  
Financial Inclusion ◽  
Financial Capability ◽  
Financial Decisions

This chapter discusses financial capability, which refers to the knowledge, skills, and confidence of people to make financial choices. It is possible that people have full access to the financial system but still make poor choices because they lack the capacity to make informed choices. Conversely, people might be fully capable of making such choices but are unable to make these choices if they are excluded from financial services. This points to the importance of 'financial capability' as a complement to financial inclusion. Critics claim that financial capability ultimately turns people into consumers or 'investor-subjects'. The chapter argues that while it is possible for financial capability to develop in this fashion, it can also be part of an alternative agenda that supports citizenship. The capacity of people to make financial decisions is an important part of citizenship, and so the task is to shape financial capability in appropriate ways rather than rejecting the idea outright.

scholarly journals The Importance of Behavioral Economics during COVID-19

2020 ◽  
Vol 12 (3(J)) ◽  
pp. 70-74 ◽  
Author(s):  
Javier Cifuentes-Faura
Keyword(s):  
Behavioral Economics ◽  
Human Behavior ◽  
Public Policies ◽  
Individual Responsibility ◽  
Infected People ◽  
Behavioral Biases ◽  
The World

Behavioral Economics seeks to understand the environments where decisions are made and to build proposals to optimize them. It offers the possibility to improve the design of public policies and, therefore, to enhance their results. The appearance of COVID-19 has caused thousands of deaths and millions of infected people around the world. This article describes the main behavioral biases that people exhibit during this pandemic. In order to curb the number of infections and stop the panic, it is essential to use Behavioral Economics tools, such as those proposed in this paper, to design messages that are simple and that motivate appropriate changes in human behavior. This work shows the importance of transmitting information correctly, of being aware of our own biases and that individual responsibility is fundamental to get out of this crisis.

Is a Less Pro-Cyclical Financial System an Achievable Goal?

2010 ◽  
Vol 211 ◽  
pp. R17-R26 ◽  
Author(s):  
Charles Goodhart
Keyword(s):  
Systemic Risk ◽  
Financial System ◽  
Limited Liability ◽  
Bank Regulation ◽  
Basel Ii ◽  
Prudential Regulation ◽  
Public Companies ◽  
Banking And Finance ◽  
The Future ◽  
Achievable Goal

Banking and finance are inherently pro-cyclical, a condition exacerbated by a combination of Basel II and mark-to-market accounting. But these latter measures have many advantages, so the need is to devise other counter-cyclical macro-prudential policies. This fragility was further enhanced by a decline in bank liquidity (reliance on wholesale funding) and a shift in govenance from partnerships to limited liability public companies. Some commentators have seen the solution to such pro-cyclicality in the guise of direct constraints on bank activity, such as the promotion of ‘narrow banking’ or limits on bank size. While there are arguments for toughening regulation as systemic risk increases, direct constraints are simplistic; more sensible ideas involve the adoption of better designed macro-prudential regulation, perhaps with some version of banking self-insurance. Quite what the future holds for bank regulation remains, however, to be decided.

Financial Inclusion

2021 ◽  
Author(s):  
Rajiv Prabhakar
Keyword(s):  
Welfare State ◽  
Critical Analysis ◽  
Financial System ◽  
Financial Inclusion ◽  
Financial Capability ◽  
The Public ◽  
Everyday Lives ◽  
Policy Debates ◽  
Key Issues ◽  
The Welfare State

Should the public play a greater role within the financial system? Decisions about money are a part of our everyday lives. Supporters promote financial inclusion as a way of helping people navigate decisions about money. However, critics fear these policies promote the financialisation of the welfare state and turn citizens into consumers. Presenting a nuanced, critical analysis of financial inclusion, the book brings together the supportive and critical literatures which have, until now, developed in parallel. Addressing key issues including the poverty premium, financial capability and housing, this essential dialogue advances crucial public, academic and policy debates, and proposes alternative paths forward.

The Business Transformation and Enterprise Architecture Framework Applied to Analyze the Historically Recent Rise and the 1975 Fall of the Lebanese Business Ecosystem

2018 ◽  
pp. 75-108
Author(s):  
Antoine Trad
Keyword(s):  
Enterprise Architecture ◽  
Financial System ◽  
Ethnically Diverse ◽  
Business Transformation ◽  
Banking And Finance ◽  
Business Ecosystem ◽  
Architecture Framework ◽  
Desert Regions ◽  
Enterprise Architecture Framework

Petro Trad's Lebanese republic was a transitory dominion entity that resulted from and was shaped by the friendly and allied France. The Lebanese-specific cosmopolitan entity was intended to become a Monaco-like structure with a unique, ethnically diverse financial system, with the Lebanese constitution developed to privilege a predominant ultraliberal banking and finance. The idea of a strong financial Franco-Lebanese entity melted down in front of a ruthless ethno-religious antagonistic conflict between Maronite Christians and the Muslim narrow majority that was also fueled by regional and global superpowers. Another very important factor that accelerated the meltdown was the attachment of remote rural and desert regions to the historical Lebanon, or Petro Trad's small Lebanon. The chapter explores the business transformation and enterprise architecture framework to analyze this change.

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