Date: February 16 (Mon.), 2009 13:00~15:00
Venue: Tokyo Station Conferece Room, 5F, SapiaTower, 1-7-12 Marunouchi, Chiyota-ku, Tokyo
Speaker 2: Dr. Muhammad Umer Chapra(Senior advisor to Islamic Reseach and Training Institute, Islamic Developmnt Bank)
In his lecture, Dr. Chapra first clearly articulated the fundamental causes for the weakness and instability of the conventional financial system, by looking at the characteristics and pathology of sub-prime loans, which were one of the sources of the current financial crisis. He pointed out that many financial products developed as part of conventional financial services, as symbolized by sub-prime loans, either lacked mechanisms for risk-sharing among the parties involved, or employed schemes that tended to promote excessive lending. For this reason, according to Dr. Chapra, they had a structure that tended to induce high leverage, speculative behavior and soaring asset prices. In the next breath, Dr. Chapra introduced features of the Islamic financial system to the participants, and indicated that the Islamic system, which features credit accommodations based on the primary principle of risk sharing and on the actual trade of goods, can provide several suggestions for transforming the management of the conventional financial system.
Many Japanese lawyers and experts in financial practices (who are interested in Islamic finance) participated, and in the question and answer session, discussions between the lecturer and participants went straight to the point. This may indicate that, in Japan, as in other countries, there is considerable concern for how the financial system based on Islam could contribute to improving the conventional finance system.
In advance of the lecture by Dr. Chapra, Professor Koji Muto (Ritsumeikan Asia Pacific University) gave a lecture titled, “How Customers See Islamic Banks – Findings from a Questionnaire Survey.” He reported the results of a valuable empirical study from the standpoint of customers who make use of Islamic finance.
(Shinsuke Nagaoka)