Archive for the ‘banking’ Category
Abu Dhabi Islamic Bank: Different From Conventional Banking
A bank that has its foundations laid in the soil of Islam in UAE is the Abu Dhabi Islamic Bank.
On the 20th of May, 1997, this bank was founded as a joint stock company which is Public. This was done through the Amiri Decree No. 9 of 1997.
The functioning got started from the 11th of November, 1998. The inauguration was done by the UAE Minister of Information and Culture, His Highness Sheikh Abdullah Bin Zayed Al Nahyan, on 18th April 1999.
The Abu Dhabi Security Market has its shares quoted on it.
Close to 100,000 people are the shareholders and share 61% of the equities with the founders of this Islamic Bank who have 39% of the shares.
These founders are the members of the family that is in rule, the ADIA (Abu Dhabi Investment Authority) and the important nationals of UAE.
The commercial functioning of the Abu Dhabi Islamic Bank started with a sum of one billion Dirhams divided in some hundred million shares, equating every share with 10 Dirhams.
Being a bank that follows Islam very strongly, the banking system is unique in itself. Religion is an important criterion to work and the operations should be based on Quran and Sunna.
This results into Halal activities only. Also, ethics play a very important role in the whole banking scenario.
A “Less Narrow” Narrow Banking
Ultimately the “correct solution” on the US’s banking troubles are not likely to originate from a straightforward resume narrow banking or even a switch the signal from macro-prudential banking either. While macro-prudential banking looks continuing being doing work in Columbia and Spain, it has no proven success in the advanced economy to this date, as well as reliance on data and data analysis is pretty dangerous. While needless to say new isn’t always “bad,” when confronted with the American economy I think it is important for starters a method that has been proven to work soundly, and then implement smaller reforms on this system to create it work even better. Research has revealed that macro-prudential analyses were not able detect the subprime crisis given it has not been the “common bank crisis”. Additionally, there’s always an inclination for your authorities and the ones conducting the analyses to obtain caught up in the same type of optimism since the private sector, and also this could be especially prevalent in a very society as driven by wealth since the US’s. However, simply narrow banking (completely separating commercial and investment banks) can be restrictive on the commercial and investment sector and would thus lower potential economic growth. The “too big to fail” proposal, whilst it has many strengths, really might appear to be a solution to merely area of the problem.
