Debt is debt, even if it's Shariah-compliant
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In a book aptly titled 'This Time Is Different', Rogoff and Reinhart, two prominent economists, show that every single financial crisis over the last 800 years has had a single root cause - excessive debt. It appears that what begins as borrowing for the funding of development infrastructure can, as it builds, lead to a spiralling of debt and financial crisis. There is a circular and reciprocal relationship between debt, leverage, vulnerability and financial distress. This applies to all borrowers, governments, corporations or other entities.
Debt , Shariah , Risk sharing , Islamic banks
Bacha, O. I. (2019). Debt is debt, even if it's Shariah-compliant. In The Malaysian Reserve, (22 April 2019).
TMR Media Sdn Bhd
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