commodity money

Barter

Monte dei Paschi di Siena

banque,

banc, bank "bench, counter"

banca,

(calculation) = byaya-onka

'byaya' (expense) and 'onka'

value
Bretton Woods

gold

(889 mg)

The GOP promises to establish a "gold commission" to examine

whether the dollar should be linked to gold even though the idea has long

 been discredited
A return to a fixed money supply would also remove the central

banks ability to offset demand shocks by varying interest rates. That could
mean a more volatile economy and higher average unemployment over time

Sir Mervyn King, governor of the Bank of England
When banks extend loans to their customers, theycreate money by crediting their customers
accounts.

Martin Wolf, chief economics editor for the Financial Times

The essence of the contemporary monetary system is creation of money, out of nothing, by private
banks often foolish lending

chairman of the Financial Services Authority, Lord Adair Turner
The financial crisis of 2007/08 occurred because we failed to constrain the private financial systems
creation of private credit and money.

Bank of England, Interpreting movements in broad money, p.377

By far the largest role in creating broad money is played by the banking sector When banks make
loans they create additional deposits for those that have borrowed the money

Independent Commission on Banking Interim Report, p65

Even before the crisis banks enjoyed various kinds of state support, including the effective right to
create money.

Paul Tucker, Deputy Governor of the Bank of England and Member of the

Monetary Policy Committee

(the term extend credit is a synonym for make loans
Banks extend credit by simply increasing the borrowing customers current account That is, banks
extend credit [i.e. make loans] by creating money
[Banks] can lend simply by expanding the two sides of their balance sheet simultaneously, creating
(broad) money.

The banking system can thus create credit and create spending power a reality not well captured by
many apparently common sense descriptions of the functions which banks perform. Banks it is often
said take deposits from savers (for instance households) and lend it to borrowers (for instance
businesses) with the quality of this credit allocation process a key driver of allocative efficiency within
the economy. But in fact they dont just allocate pre-existing savings, collectively they create both
credit and the deposit money which appears to finance that credit.

the Treasury, Bank of England and Financial Services Authority. In 2011

[C]ommercial banks have an even greater power than that: they have the power to create creditthat
is, moneyby expanding their balance sheets. It is not widely understood how important this power
is: of the money presently in circulation in the UK economy today, three per cent takes the form of
cash; 97 per cent is in credit and deposits. This financial alchemy is an extraordinary privilege, which
we as citizens and taxpayers underwrite.

http://www.wikisummaries.org/Confessions_of_an_economic_hitman

commercial

riba-al-jahiliyya

Barter

Productive or Consumption Loans

intrinsic nature

intrinsic nature

Justinian

transaction

definition

(adultery
(gambling) (liquor)

(fasting)or fornication)

principal

theoretical ground

theoretical ground

commodity

intrinsic utility.

commodity

qualities

units of money
medium of exchange

medium of exchange

measure of value.

consumption good Kien's theory

production good

In order to ensure that money performs its true function of operating as a means of exchange and distribution,
it is desirable that it should cease to be traded as a commodity."

speculative

stipulated excess

www.nyazee.com/islbanks/riba/riba.html.

spot sale

stipulated excess

stipulated excess

M. N. Siddiqi, Riba, Bank Interest, and The Rationale of Its Prohibition (2004), 38.

slamic Financial Service (Jeddah, 2005), 44.

Arab Law Quarterly 21 (2007) 285-316