8th International Conference on Advances in Social Science, Management and Human Behaviour - SMHB
Author(s) : Narcisa Roxana M. Mosteanu
The article aims to underline the distinguish approaches between Islamic and Conventional financial system, and to show the healthy approach of finance, from all beneficiaries perspectivesâ€“individuals, financial institutions and governments. The author intentions are to find out which system can sustain a healthy economy, resist to financial turbulences, and help individual and businesses to develop themselves and the entire society. In addition, yes, through this paper, the study found out why Islamic financial system is more sustainable, secure and pass successful the financial crisis from 2008. Furth more, the research paper concludes that for an economic sustainable development these two-financial systems can come together, learn from each other. The current dynamic movement of the worldâ€Ÿ economy finances, it creates the framework for Conventional financial system to be able to develop and offer Islamic finance products and services. Even more, in the present time, banking system starts to operate Conventional Banks with Islamic Windows. During the research paper, the finds are very informative and presented a different way of approaching trade, financial transactions, risk, profit and economic development. The investigation invites the readers to discover that Islamic finance is healthier (not harmful) and much closer to citizens, based on profitloss- and risk sharing, real assets backed, coming from the principles of life preached by Islamic principles of life. The Conventional finance are based strictly on financial, banking, commercial laws, on economic flows, based on debtor-creditor and profit principles,leaving the whole risk on the customer side and not all the time financial transactions are real assets backed. Research has revealed and comes to present and stand that, in the last decade, Islamic finance and bank'efficiency was better than Conventional finance and banks one, especially during a crisis period. This efficiency of Islamic finance comes from their unique and special principles of life, which is risk-averse and anti-speculation, and only healthy financial activity and transactions should be conducted, compared to Conventional one, which are profit oriented, and give more attention to business than healthy and non-risky financial transactions. These Islamic principles of life drove and lead to the capacity of resisting to the financial turbulences. Islamic finance appears to be more helpful healthy and have realistic approach. The author conclude that this can be the one of the main reason that Conventional finance is open oriented to have Islamic windows.