It is urgent to adopt other than the current financial system model that is not moved by usury, by extreme greed. Without prejudice, this new model could be based on the Islamic financial system that operates around a fundamental principle which is to avoid speculation. In Islamic banking, everything is done to prevent those who have money to take advantage of who has not money or who needs it. In an Islamic bank there aren´t products of traditional financial market, for example, derivatives which are contracts that derive from a reference rate or index that can be physical (coffee, gold, etc.) or financial (stocks, interest rates , etc.).

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A BANKING SYSTEM DIFFERENT IS POSSIBLE
Fernando Alcoforado *
Half a century ago, the banking appeared to be a relatively simple art. The banks have
gone through a process of transformation in its core business, leaving behind its classic
function of intermediary between savers and lenders. Benefiting from the opening of the
world economy from the 1990s, these institutions have become diversified financial
groups and conglomerates whose profits come mainly from credit creation, which has
become the main means of money creation. In this process, the central banks of most
countries lost completely control of their economic systems.
Banks get their higher profits ever facilitating the concentration and centralization of
capital (operations call "mergers and acquisitions"), charging lucrative fees for
"advising" and endorsing the financing of mergers and acquisitions. The second source
of profits is speculating in general, including on debt trading of countries and investing
in global securities markets. No other sector of the economy can boast rates of return as
high, or even any one of the largest production companies can even equalize the record
profits of the financial system.
The values of global transactions illustrate the size of the financial sector: in 2002,
world GDP was 32.3 trillion dollars, while financial transactions amounted to 1,140.6
trillion. At the beginning of the crisis in 2008, while the world GDP was 60.1 trillion,
financial transactions reached 3,628 trillion (See the article by François Chesnais Les
dettes illégitime. Quand les banques font main basse sur les politiques publiques. Paris :
Editions Raisons d'agir, 2011). According to François Chesnais there will be no end to
the global economic crisis that erupted in 2008 in the United States while banks and
financial investors are in charge, with governments adopting policies fully addressed the
interests of rentiers and to give survival of the regime guided by debt as it is currently
happening.
Given this fact, it is urgent to adopt other than the current financial system model that is
not moved by usury, by extreme greed. Without prejudice, this new model could be
based on the Islamic financial system that operates around a fundamental principle
which is to avoid speculation. In Islamic banking, everything is done to prevent those
who have money to take advantage of who has not money or who needs it. In an Islamic
bank there aren´t products of traditional financial market, for example, derivatives
which are contracts that derive from a reference rate or index that can be physical
(coffee, gold, etc.) or financial (stocks, interest rates , etc.) [See article Os bancos do
Islão (The Banks of Islam) available on the website
<http://gilsonsampaio.blogspot.com.br/2010/12/o-sistema -bancario-islamico.html>].
In the Islamic financial system, charging interest is prohibited. The money should be
used to make the economy grow. The prohibition of interest (riba) is intended to
preserve fair and equitable development of society, avoiding all forms of exploitation.
This precept is interpreted as a prohibition of usury, to protect the poor from
exploitation. Financial transactions should always be linked to commercial activities,
mainly for the purchase of consumer goods or investments for the production and
distribution of real goods and services. It is only allowed to make money provided that
funding contributes to an activity that adds some kind of value. The payment of fees for
additional services is allowed, but should not be a disguised form of interest.

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It should be noted that Islamic financial practices need to be subjected to what is known
as Sharia, the law in force drawn from the Koran. The Sharia is the name given to the
Islamic code of laws and contains provisions relating not only to the personal sphere,
but also social, political and economic. Sharia states that the lender of money becomes
involved, at percentage fixed in the profits and losses of those who take the money
borrowed. The origins of Islamic financial practices dating back to the 1890s, when
Barclays Bank opened a branch in Cairo to process part of the funding related to the
construction of the Suez Canal. Since then, the religious criticism of the charges of
financial charges (riba) or interest becomes one of the points of Islamic financial
practices.
Between the 1930s and 1950s, based on Islamic economic outlook, economists began to
criticize the practice of interest and to propose alternatives to it, such as partnerships or
economic associations. In 1953, Islamic economists have developed a description of
what would be a financial system without interest. In this alternative system, the
charging of interest would be replaced by combinations of partnerships or consortia.
The profit is distributed between the two parties involved in a predetermined ratio,
agreed at the time of contract formation. And again, the financial loss falls only on the
financiers, while the loss of the entrepreneur is to not receive any reward for their
services.
In Islam, the belief is that the money is there to circulate and generate wealth. The
money needs to be used and put to circulate. What you cannot do is speculate. The
Islamic banking goes against many of the principles that govern its western counterpart,
and the most obvious difference is the lack of interest. The crisis faced by the world
capitalist system is based on an unhealthy finance prejudicial to the interests of
humanity. And not by chance, the collapse started in 2008 with US subprimes did not
fail any Islamic bank.
Islamic financial institutions have the approximate weight of 230 billion dollars, that is,
forty times more than in 1982 [See article Os paradoxos das finanças islâmicas
(Paradoxes of Islamic finance) available on the website <http://diplo.uol.com.br/2001 -
09, a42>]. Following the example of Citibank, which, since 1996, established its Islamic
branch in the emirate of Bahrain, most major Western financial institutions are currently
engaged in this type of activity, in the form of branches,of "Islamic ticket windows" or
products financial intended for Muslim clientele.
There is even a 'Dow Jones Islamic market ", symbol of integration of Islamic finance in
the global economy. This phenomenon may seem paradoxical, since some consider
Islam incompatible with the "new world order", especially with the rise of Al Qaeda and
the Islamic State which are sponsoring terrorism in various parts of the world. But the
indisputable fact is that the Islamic financial model represents the antithesis of the
model that prevails in the West that tends to lead to the debacle the world economy.
* Fernando Alcoforado, member of the Bahia Academy of Education, engineer and doctor of Territorial
Planning and Regional Development from the University of Barcelona, a university professor and
consultant in strategic planning, business planning, regional planning and planning of energy systems, is
the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova
(Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São
Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado.
Universidade de Barcelona, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e
Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX
e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of

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the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller
Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe
Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e
combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011),
Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012) and
Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV,
Curitiba, 2015).