Friday, May 14, 2010

Rating agencies (and Shari`a advising) need to be regulated by governments

In an interesting development, the U.S. government will now get more involved in regulating the business of rating bonds:
The Senate approved a provision that would thrust the government into the process of determining who rates complex bond deals, in a move to end alleged conflicts of interest blamed by some for worsening the financial crisis.
Likewise, I have often argued that Shari`a advising (rating of Islamicity, albeit on a 0 or 1 scale) should be regulated by government and staffed by salaried employees. This is not an ad hominem attack on any Shari`a advisors, as many like to suggest. It is merely good business practice.

45 Comments:

Blogger 惟定 said...

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11:37 PM  
Blogger 淑君 said...

仇恨是一把雙刃劍,傷了別人,也傷了自己...............................................................

11:37 PM  
Blogger heraish said...

http://arabnews.com/economy/islamicfinance/article54441.ece

8:42 AM  
Blogger heraish said...

Subject: Check this out, Arizona is also doing Sukuk



http://www.nytimes.com/2010/05/05/realestate/commercial/05states.html

8:43 AM  
Blogger madil3d said...

Most Islamic Financial Institutions have many branches in different coutries and their Shairah board is only located in one country. So how would all other countries control the decisions of "offshore" boards.
Besides, how can American Senate have the power and knowledge to contest decisions from specialists from the field.
Financialislam.com

8:07 AM  
Blogger Shared Folders said...

It means that Shariah boards are no different from economic interest driven rating agencies.
What about then the morality and faith aspect of the shariah scholars? If you look at the history of Islam, all scholars were independent and had no relation with state which would ensure their fairness. I think that there should be distinction from this aspect and its not quite right to draw parallels between the Wall Street folks and shariah scholars at least from morality perspective.

9:45 PM  
Blogger kio said...

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2:59 AM  
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2:55 AM  
Blogger heraish said...

http://www.khaleejtimes.com/Displayarticle08.asp?section=biztalk&xfile=/data/biztalk/2010/June/biztalk_June2.xml

Harvard is now producing shariah finance scholars!

1:52 PM  
Blogger  said...

一定要保持最佳狀況呦,加油!!!期待你發表的新文章!........................................

5:34 PM  
Blogger heraish said...

You should suggest a panel of independent shariah scholars to vet these arrangements for the US government. And suggestions for legal changes that would facilitate shariah compliant financing. Keith Ellison and Andre Carson both on the financial committee would be good point men for this initiative.

4:56 PM  
Blogger heraish said...

Check this clause out. The “lender” has a choice to have any combination of fixed interest and appreciation according to New York law. You can then have a fixed interest rate of zero theoretically.

New York mortgage law:


Appreciation/Interest
The authorized lender, at its option, can receive no more than 20 percent of any future
appreciation of the property securing the reverse mortgage loan as full or partial
consideration for the making of the loan. The lender’s entitlement to the appreciation
commences with the first of the following events:
• The end of the loan term; or
• Ten years after the reverse mortgage loan commences.
An authorized lender may charge a fixed rate of interest on the outstanding amount of
monies advanced under the reverse mortgage agreement or any combination of fixed
interest and appreciation.

6:25 PM  
Blogger ElwoodK_Rank佳玲 said...

與人相處多微笑,個人獨處多沈思。 ............................................................

4:26 AM  
Blogger hernande said...

Beauty, unaccompanied by virtue, is as a flower without perfume...................................................

5:24 PM  
Blogger 雅馨 said...

好的部落格,希望您能繼續堅持!!!..................................................

2:42 AM  
Blogger 慧君 said...

More haste, less speed...................................................................

8:49 PM  
Blogger heraish said...

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=369397&version=1&template_id=48&parent_id=28

Islamic banks are attracting deposits in Syria big time!

9:11 AM  
Blogger 江婷 said...

死亡是悲哀的,但活得不快樂更悲哀。....................................................................

5:56 AM  
Blogger 婷珊 said...

喜歡你的部落格,留言請您繼續加油.................................................................

5:57 AM  
Blogger heraish said...

http://www.northjersey.com/news/business/97366519_Reaching_out_to_Muslims.html

New Jersey credit union is offering islamic finance now!

4:50 PM  
Blogger heraish said...

http://rogueeconomist.blogspot.com/2009/04/islamic-banking-in-brunei.html

5:35 PM  
Blogger heraish said...

I have a new theory in Islamic finance.

I purchased a house for $216111.11. I put 20% as a down payment. So the balance is $172888.89. I have a 15 year mortgage with a rate of 4.75%. The property would rent for $1700.00 in the market. The mortgage payment is $1344.78. Out of which $660.43 goes to my equity in the first month. And $684.35 goes towards interest. With taxes and insurance the monthly payment is $1700.00. So taxes and insurance expense is $356.00 Since I have only a 20% stake in the property. If this was a true equity partnership. The partner should pay 80% of the taxes and insurance which equals $284.8. I should pay $71.20. I should then pay $1075.2 to my partner. Which is 80% of $1700.00 minus $284.8 for taxes. Currently the partner is only getting $684.35. That is a difference of $414.77. Which means that this $390.65 is sort of riba/usury in my favor. So to be purely Islamic I need. I should donate this $390.65 to charity on behalf of my partner to cleanse my income.

7:30 PM  
Blogger 嘉惠 said...

人不能像動物一樣活著,而應該追求知識和美德.................................................................

2:42 AM  
Blogger AlphonseH_Va哲維 said...

人不能像動物一樣活著,而應該追求知識和美德............................................................

6:43 AM  
Blogger heraish said...

A true Shariah-based solution for home ownership is finally within reach! You can own a home without debt, without riba, and without a mortgage. The Home Partnership Program conforms 100% to the letter and spirit of Islamic law without compromise. To learn how the program works please watch the video:

www.halalinc.com

7:10 AM  
Blogger dawsonfelicia張君dawsonfelicia均 said...

人生是故事的創造與遺忘。............................................................

11:06 PM  
Blogger 許紀廷 said...

來看你了~心在、愛在、牽掛在,幸福才會繁衍不息^^..................................................

2:23 AM  
Blogger 佳皓佳皓 said...

唯有用熱情、用智慧去觀察事物,這事物才會把他的秘密,洩漏給我們............................................................

3:36 AM  
Blogger 吳婷婷 said...

與其期盼別人疼你,不如自己疼自己。..................................................

3:36 AM  
Blogger 吳婷婷 said...

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5:39 PM  
Blogger 林秋萍林秋萍 said...

要用心經營哦~~祝福你~~
............................................................

2:56 AM  
Blogger heraish said...

Dr. Nasr Abu Zayd has passed away!

9:03 AM  
Blogger Florida said...

Nice to read this piece.
Keep writing more about it. It is really gracefully and very well written skill.
Thanks for sharing.
Florida Residential Mortgages

12:26 PM  
Blogger 吳庭 said...

「仁慈」二個字,就能讓冬天三個月都溫暖。..................................................

5:26 AM  
Blogger 曹彥均曹彥均 said...

讚啦~~多謝分享!!>ˍ<............................................................

1:58 AM  
Blogger 楊燕沛楊燕沛 said...

Knowledge is a treasure, but practice is the key to it.................................................

1:36 AM  
Blogger 陳陳昀人良喬 said...

愛,拆開來是心和受兩個字。用心去接受對方的一切,用心去愛對方的所有。......................................................................

2:03 AM  
Blogger 凱許倫 said...

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4:03 AM  
Blogger 玄王季玄王季玄王季 said...

幸福不是一切,人還有責任。............................................................

10:10 PM  
Blogger 皇紫勳紫勳豪 said...

Pen and ink is wits plough...................................................................

1:06 AM  
Blogger 立和辛和胡辛和辛偉 said...

這麼用心的經營你的文章, 當然值得我們留連拜訪的!...............................................................

6:59 AM  
Blogger 翊翊翊翊張瑜翊翊翊 said...

肯定與支持你!!!加油囉~..................................................

8:32 AM  
Blogger 柔于真于真于真林姍 said...

值得一看再看的格子,請加油 ..................................................................

8:23 PM  
Blogger junjun said...

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6:32 AM  
Blogger  said...

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9:30 AM  

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