Page 4 - Islamic Finance Practices

system from interest rate fluctuations and

therefore, minimize the possibility of financial

instability.

Fragility in banking can potentially destroy the

wealth of individuals and families. The 2007 US

Subprime crises destroyed $35.3 trillion of wealth

globally. The US government alone took $20

trillion of public funds over a period of two and a

half years to lift the total world market

capitalization of listed companies by $16.4 trillion.

While the protection of wealth (al-mal) constitutes
one element of the maqasid shariah, through the

institutions of zakat and waqf, property rights and

the prohibition of riba, all these will crumble to

pieces when Islamic banks remain fragile and

vulnerable to financial shocks. All of the hard-

earned income from halal investments will go

down the drain swept by falling asset prices and
business closures adversely impacting society at

large.