There are opportunities for systemic change within the midst of the current global economic crisis, said Toby Birch - the investment guru who predicted the global financial crisis, and who is a keynote speaker at the forthcoming 15th Annual World Islamic Banking Conference (WIBC 2008). “It will be the dawn of a new and better structure for the global financial markets if we all join together against a common enemy - a decaying old system that has become increasingly impractical in these current times,” he said. Drawing from historical experiences, according to Birch, will be a good place to start if the global financial system is to regain its feet, drawing on best practices from the several models: “We need an economic model that re-emphasizes the positive elements of capitalism and a banking system that is symbiotic and not self-seeking. Fairness, balance and altruism in finance may sound Utopian or old-fashioned but we are in desperate need of some ancient acumen. The current global financial landscape needs not just an overhaul of the mechanisms but a thorough rethinking and a fundamental new generation remedy.” On the issue of Islamic finance as an alternative, Birch agrees that “Islamic mortgage holders pay rent rather than interest and banks match loans with deposits, charging fees rather than interest margin to pay for their services. The method may sound like semantics but there is a crucial difference: it avoids the creation of credit which is inflationary for the economy and ultimately self-destructive for the bank. In this form of finance there are no guarantees or deposit protection schemes but lending is far more responsible. Islamic banks are by default small, well capitalized and conservative. For many, a safe bank paying no interest may well be better than a bust one which offered 7 percent. To receive a return, savers may pool their money and participate in low risk schemes investing in communal projects.” He added: “Though certain aspects of Islamic Finance, e.g. property funds, have also been affected by the crisis, albeit in a smaller scale, joint ventures and private equity (without enormous leverage) also appeal with their partnership approach which shares risk and reward.” Birch will address more than 1,000 delegates from over 45 countries attending 15th anniversary of WIBC, the world's largest gathering of Islamic finance leaders. The conference will be held on Nov. 23
