Now that Barclays Bank has been more or less taken over by Arabs, will Barclays' mortgage borrowers be able to refuse to pay interest, seeing as of how one of the ground rules of Islamic investing is that you aren't allowed to make a profit from money-lending?
Which considerate mortgage borrower would want the owners of their mortgage lender to go to Hell*?
* Or whatever the equivalent is in Islamic mythology.
Friday, 31 October 2008
Barclays to cease charging interest!
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11 comments:
Hmm. The sharia mortgage deals that I've seen seem to disguise interest (money rent) as property rent. And they do make a profit.
For sure. But from the borrower's point of view it would be a heck of a good starting point for re-negotiating terms.
...and I'd be a bit careful if I were you..strictly speaking it's not Islamic 'mythology' but Islamic 'theology', ditto Christian. It's not 'myth' it's Faith.
(deleted this post previously - crappy spelling and grammar!)
I suspect the dead members of the largely quaker families who founded the predecessor banks of Barclays are revolving in their graves as we speak.
BTW if it looks like interest, smells like interest, calculates like interest, pays like interest - guess what it is.
Yep, you can go to Looydstsb/HBOS/RBS and say 'Now, my o/d is £5,000 so if you give me £15,000 back we'll call it quits?'
L, let's split the difference - how about "Islamic mytheology"?
I'm with Umbungo, they're usurers that dare not admit it. Wonder where that leaves bank accounts? If you put money in an account, you are loaning them it, hence the interest. Do very devout Muslims decline this interest or simply not open said accounts?
Thank God, Christian Britain had the Jews all those years.
It's not interest - money rent - that's the problem. It's fractional reserve banking and money 'creation'.
PT, the Islamic bank doesn't charge 'interest'. As L points out; they disguise it as property rent. And the depositor doesn't earn 'interest', he or she is paid a share of the property rent, calculated as a fixed percentage of the property rent proportional to the amount on deposit ...
L, it 's even simpler than that. Fractional reserve banking is in itself perfectly acceptable; what is key to all this is enforcing minimum capital adequacy ratios. If this minimum capital ratio is halved, the money supply doubles, leading to an asset price bubble, leading to a credit bubble, stoking the asset price bubble etc.
Until it goes *pop* of course, then it all gets very unpleasant.
I know, Mark, I'm saying the rent notion is a fig leaf for interest, hence my agreement with Umbungo.
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