A tale of two crises: the rise of distrust
“The business of money is first and foremost the business of other people’s money. ” Jean-Jacques Rommes, CEO of the Luxembourg Bankers’ Association, went to the heart of the question of ethics in finance in a speech at the recent Unicredit Islamic Finance conference. Tackling the subjects of money, religion and morality, he went on to state that there were lessons to be learned from Islamic finance:principles that have been abandoned by conventional finance but which are entrenched in our civil law.
“Islamic finance is raising some of the fundamental questions that classical finance fails to properly address”, he continued. Questions such as:
- What is the reason and the nature of interest and what is its justification?
- What is the reason for finance, if not concrete human actions?
- What is the basis of a contract, if not a partnership between parties that share a common interest and fate?
- What is the interest of a financial product that does not provide transparency regarding the object that is to be financed?
“We need to seriously engage with the ethical questions that Islamic finance raises.” He said, concluding, “Regardless of the differences in how we practice finance, the moral imperative should be the same in the end: placing the human being at the heart of the economy rather than at its service.” ER