Origin of & Solution to Global Financial Meltdown: An Islamic View

Al Mamun Md., Md. Abdul Hannan Mia


The meltdown of financial markets across the world is one of the most common characteristics of modern
capitalist economy. Starting with the stock market crash of 1901 through the great depression of 1930s to the
Black Monday of 1987, the Asian financial crisis of 1997 and finally the latest tsunami of global financial crisis,
the history of major stock market crashes are undoubtedly a testimony of its nature. According to IMF, the world
has witnessed more than 100 stock market crisis in last 30 years. However, with the endeavors of so many
talented academicians, policymakers, and researchers the reasons behind these crashes still remain unexplored.
After almost 25 years nobody has a solid answer to the reasons behind stock market crash in 1987. Meetings
after meetings, summits after summits, conferences after conferences of the world leaders, thinkers and
academicians in the form of DAVOS summit, G-8 summit, EU summits, G-20 summits etc. have failed
miserably to identify the root causes behind the crisis. At times the expectations of finding a common solution to
the problem from such high level summits have ended up with common blame-games while the crisis continues
to multiply as various economies enters into much painful long term recessions with human stories of sufferings,
job loss and even suicide. Therefore, this article aims at uncovering the root causes of repeated form of global
financial crisis by critically investigating the philosophical and functional foundations of existing system of
financial economy. A detailed review of fundamentals, methods and facts about capitalism clearly highlights the
inevitability of such problem to exist in existing financial economic model in the light of Islamic economic

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DOI: https://doi.org/10.5539/ijbm.v7n12p114

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