HOPE ON ISLAMIC FINANCE

German public was shocked by the suicide of Adolf Merckle, the fifth richest person in the country or the richest man the world number 94 in Forbes magazine in 2008. Merckle rammed himself into a train running on Blaubeureun in southwestern Germany. The family, as quoted by Reuters said the cause of suicide Merckle because of investment losses in the stock market due to financial crisis. Experienced losses of 400 million Euros.

Merckle's death adds a long list of suicide during the crisis after the previous month, a French investment manager Thierry Magon de la Villehuchet also do the same. Thierry ended his life due Madoff fooled for USD1, 4 billion. In Indonesia, the excesses of the crisis has also brought loss of life as experienced by the Manager Sarijaya Securities, Ustadzah Surya Hendra. Ustadzah found dead, hanged himself digarasi car home, in East Jakarta.

The cases cited indicate how powerful the socio-psychological impact of the global financial crisis. The crisis not only caused thousands of workers lost their jobs, but also have claimed lives.

Epicenter of the financial crisis that originated in the United States (U.S.) this has now spread to all over the world. In the modern financial world, such crises are not new, and not just this time to come. According to Roy Davies and Glyn Davies, in The History of Money From Ancient time oi the Present Day, during the 20th century there have been more than 20 times the big crisis, some of which are global.

This indicates that there is something wrong in the modern conventional finance system. If observed, the current crisis originated from the credit crunch property sector.

Impact of credit crunch with a fast spreading to all U.S. financial institutions because of the mortgage-based derivative products. Derivative products such as CDO (Collateralized Debt Obligation), and Credit Default Swap (CDS) was initially very loved by investors because the yield (yield) higher than bank interest rates. But when the customer fails to pay the housing, the value of these products decreased dramatically resulting in the collapse of many financial institutions.

Before the crisis, U.S. banking is fond of pouring their money in financial markets rather than giving credit to the real sector. It resulted in the economic bubble or 'bubble' in the financial markets. The proof, the value of Gross Domestic Product (GDP) in 2007 amounted to U.S. $ 14 trillion U.S. dollars. While the capitalization of derivative products reached U.S. $ 60 trillion.

Bankruptcy of U.S. financial industry also did not escape the discipline of market players low on the regulatory. Madoff case adverse to investors $ 160 billion to proof it. In his confession, Madoff to falsify the financial statements of the security company because close to the circle of power.

The financial crisis is happening right now can not be discharged from U.S. private consumption level is high. Referring to Morgan Stanley research, in 2007 U.S. consumption rate reached 72 percent of GDP. Power consumption is not driven from the revenue, but rather the result of debt. Thus, the U.S. economy actually grew because of the debt.

As a result of the U.S. stock market crisis suffered substantial losses of up to $ 50 trillion. Goods times the rate of loss is greatest in the history of mankind who inhabit this planet. To overcome the crisis, the U.S. government has committed to provide funds amounting to USD 8.5 trillion. The details of funds amounting to USD 5.8 trillion, the Fed's money to buy financial assets are rotten. In addition, funds amounting to USD 2 trillion for other schemes and USD 700 billion to bail out.

When compared to the Marshal Plan funds (U.S. assistance for the development of Western European countries after World War II) amounted to $ 115 billion, the financial value to overcome the current crisis is much greater. Once again, it shows just how colossal financial crisis that is happening now.

Although the world is facing the most severe financial crisis, but most conventional economists are still many who feel relaxed just because this kind of crisis is part of the characteristics of the capitalist economy. In capitalism, is to become commonplace the world economy goes into a business cycle that rotates from crisis to recovery, from boom to recession. In their view the chain that form a vicious circle is considered to be taken for granted, because it does not need to worry. I'll also be back to normal again.

However, most of the executive and finance businesses conventional start thinking another. They see the financial system with a different paradigm of Islamic financial system, known in Indonesia with Islamic finance. Data show that in times of crisis that struck the world financial system, there are financial institutions that are not affected, particularly if viewed from the causes of the crisis.

Anyone who tries to learn the Islamic financial system in an honest and objective will discover the benefits of this system compared with conventional traditional system. This was revealed by Joseph Yam, Chief Executive Hong Kong Monetary Authority. After studying at a glance, he said "Islamic finance to give impetus to business activity that is able to generate profits legitimate (halal) and is based on principles of fairness, sharing risks and practice good morals.

Hope Vatican
Now the attention to the Islamic financial system is not only a monopoly of experts and global financial businesses alone. Even the Vatican official's weekly editorials L Osservatore Romano has published an article about the advantages of Islamic finance on March 4, 2009. Weekly editorial was written, we believe that Islamic finance can contribute to remodel and improve the financial rules of the west .... In another part written ethical principles that form the basis of Islamic finance to bring banking closer to customers and a genuine spirit of service will set it apart from banking services (conventional). Even the Vatican is hoping weekly editorial Sukuk can be used, for example, to help the car industry's most severely affected (crisis) or to build an Olympic stadium that will come in London.

The Nobel Prize in Economics in 1999, Joseph E Stiglitz, the idea is similar to the concept of Islamic finance. Stiglitz bid need a new economic system the more the balance between real and monetary sectors.