Autumn Leaves

Today is T-Shirt weather - quite warm at 18 Deg C. The sceneries outside are quite breathtaking, the leaves everywhere seem to have gone through a makeover as if someone has put colours on them to brighten up the place.

The big thing on everyone's minds here right now is the financial crisis. Some in the office are quite nervous. With so many banks going down, companies struggling to borrow money and many businesses really struggling. It just feel gloom and doom. Some simply shrugged it off - stating that the stock markets are actually much higher than pre 9/11.

Amidst all these, I read in the paper that interests in Islamic finance are on the up. Islamic instituitions are not affected as much as they do not face the same credit crunch faced by conventional banking system. When one purchase a house, you put say 20% while the bank contribute the rest. You pay the rest through buy back in the form of rent until it is all covered and your share increase. As owner of the property, the bank faces risks associated with property ownership. This is a situation that does not exist under an interest mortgage, where the bank never actually owns the property. The fomer is somewhat a fail safe system where the bank is more involved in the business rather than just simply lending out money.