ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by S RamachandranSubscribe to S Ramachandran

Banking Regulations and Islamic Finance

S Ramachandran This paper provides a framework for understanding the effects of 'non-bank' banks and other financial innovations that are taking place in many countries. The issues have immediate relevance for Islamic economies where profit-sharing schemes are replacing interest payments. The implications of this change are far-reaching and some of the potentially dangerous effects, especially on financial intermediation and banking regulations are examined in this paper Introduction THIS paper examines why commercial banks are regulated more than are other firms in an economy and analyses the implications of banks taking equity positions in enterprises. The analysis in this paper is quite general and applies equally to all economies. It provides a framework for understanding the effects of "non-bank" banks and other financial innovations that are taking place in many countries. The issues, however, have immediate relevance for Islamic economies where profit-sharing schemes are replacing interest payments. The implications of this change are far-reaching and some of the potentially dangerous effects, especially on financial intermediation and banking regulations, are examined, in this paper.

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