Tuesday, May 12, 2009

Islamic Banking

I read an article about Islamic banking today. The illustration they gave--buying a car--sounds like a distinction without a difference. What is the difference between buying a car and making payments that include interest, than buying a car from a bank, and making payments that include a resale mark up for the same amount as the interest? But hey, whatever works.

It could be that they're just gave a bad example, because the way they describe it elsewhere it comes across as industrial sharecropping. I can't see much of an upside for banks, which to me means they'll be much more conservative in their lending, which, if you stop to think about it, was all that was needed.

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