One of the main activities of the Islamic money market is channeling of excess funds from one financial institution to the investment scheme and profit sharing of another. Because the latter lacks funds to cope with it or because it considers the financial commitment too large and therefore prefers sharing of risks. Moreover, intervention of the central bank may here prove to be necessary, especially in periods when investment opportunities on the basis of profit sharing, not finding financing options by the banks themselves, require an ultimate lender.
The Islamic financial system outlined here can be detailed on several points:
- the risks of capital loss (from purchase and sale of financial securities) and means to reduce these risks.
- sterile possession of money in current accounts or in currency and means to make to make them the smallest possible quantitatively.
- the necessity or not for each of the “banking models” to hold reserves on deposits in current accounts for which is the first model and the deposits for loans concerning the second.
- In the end, it is not unrealistic to expect from the Islamic financial system that it favors establishment of a better allocation of resources and a competitive economy, greater financial and economic stability, and finally, a more “healthy“ economic growth, more Islamic, but not as strong.