We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Islamic and Western banking: A Chicago perspective.
- Abstract
NON-BANK FINANCIAL INTERMEDIATION 1 As with bank lending, non-bank lending is secured by collateral: as a pawnbroker lends against the security of a gold watch, so a building society lends against the security of property. Although without contemporaneous or recent comparisons, the Chicago Plan of the 1930s resonates with Islamic banking, as characterised by the prohibition of I riba i (usury) and the promotion of equity partnerships. THE CHICAGO PLAN The Chicago Plan of the 1930s was motivated by unsecured bank lending, bank insolvencies, the Wall Street stock-market crash and the Great Depression that followed. As non-bank "A" obtains a loan from non-bank "B" against high-quality collateral (say, a sovereign bond), non-bank "B" might repeat that process by re-hypothecating the security to non-bank "C"; and so on.
- Subjects
ISLAMIC finance; BUSINESS cycles; REPURCHASE agreements; CENTRAL banking industry; ISLAMIC bonds; DEPOSIT banking; BANK deposits; FINANCIAL services industry
- Publication
Economic Affairs, 2022, Vol 42, Issue 1, p179
- ISSN
0265-0665
- Publication type
Article
- DOI
10.1111/ecaf.12508