Islamic Finance: Panacea for the Global Financial System

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With the recent troubles in the global economy, some have proposed that a financial system based on sharia, or Islamic law is a better approach than traditional finance. The argument is made that Islamic finance is a safer approach, and less vulnerable to questionable financial transactions which may have led to the global recession beginning in 2008. This paper explores the basics of Islamic finance, and while agreeing that Islamic finance has an important role to play in the global financial system, concludes that it is not a viable substitute for traditional financial management.