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THE PROHIBITION OF RIBA (USURY)
THE PROHIBITION OF RIBA (USURY)

... o Generally, trade means exchange of any goods for money. You can buy or sell goods for money at any price. o In murabaha, you buy an item at one price and sell it to someone at a higher price, allowing him to pay you for it over time. In riba, you lend someone some money and require him to pay back ...
An Assessment of Reserve Adequacy in Caribbean Economies
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... money and 5% of exports of goods 4 . In general, coverage of between 100%–150% of this indicator is considered to be adequate for a typical country. Recognising the limited applicability of the IMF (2011) measure to small islands, Mwase (2012) developed a more operationally relevant metric that inc ...
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... models’ theoretical appeal, they have still not been able to adequately explain one of the oldest and most fundamental artefacts of economic life – i.e. money. The neglect of money in monetary policy circles seems to have come to an end since the dawn of the financial crisis in 2007. Since central ...
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Information Acquisition vs. Liquidity in Financial Markets
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... revitalize declining growth. Moreover, the two motives can reinforce each other. When the financial sector is saddled with non-performing loans, the government would want to make provisions against these loans (see Krueger, 2002, for a discussion of prevailing standards for provisions). The mercanti ...
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Credit Creation and its Contribution to Financial Crises
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... This master thesis investigates the role of credit creation and its contribution to financial crises. The idea that banks are the creators of credit is at the core of this work. Other aspects relating to credit creation, like the theory of endogenous money, imperfect information and rationed markets ...
A Proposal for Supplying the Nations with the necessary Means in a
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... Money, deposits, accounts, and the money supply Some people may be wondering about the proposal because they think money comes from the central bank anyway. When the banks need fresh money they can be refinanced at the central bank by borrowing, i.e. the central bank issues money to the banks by gra ...
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Fractional-reserve banking

Fractional-reserve banking is the practice whereby a bank accepts deposits, and holds reserves that are a fraction of the amount of its deposit liabilities. Reserves are held at the bank as currency, or as deposits in the bank's accounts at the central bank. Fractional-reserve banking is the current form of banking practiced in most countries worldwide.Fractional-reserve banking allows banks to act as financial intermediaries between borrowers and savers, and to provide longer-term loans to borrowers while providing immediate liquidity to depositors (providing the function of maturity transformation). However, a bank can experience a bank run if depositors wish to withdraw more funds than the reserves held by the bank. To mitigate the risks of bank runs and systemic crises (when problems are extreme and widespread), governments of most countries regulate and oversee commercial banks, provide deposit insurance and act as lender of last resort to commercial banks.Because bank deposits are usually considered money in their own right, and because banks hold reserves that are less than their deposit liabilities, fractional-reserve banking permits the money supply to grow beyond the amount of the underlying reserves of base money originally created by the central bank. In most countries, the central bank (or other monetary authority) regulates bank credit creation, imposing reserve requirements and capital adequacy ratios. This can limit the amount of money creation that occurs in the commercial banking system, and helps to ensure that banks are solvent and have enough funds to meet demand for withdrawals. However, rather than directly controlling the money supply, central banks usually pursue an interest rate target to control inflation and bank issuance of credit.
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