MANAMA: Lessons will not be learned from the current global financial chaos, it was claimed yesterday at a major conference on Islamic finance in Bahrain.
"The downturn was genetically engineered by the very people whom we trusted our hard earned money with," Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) secretary general Dr Mohamad Nedal Alchaar, told delegates at the opening session of the AAOIFI-World Bank annual conference on Islamic banking and finance at the Crowne Plaza.
He said greed and chronic insomnia were the problems the global system faced, but Islamic finance could dampen these down.
"A new financial system in emerging, it is the Islamic banking and finance system."
"What we live in today is an innate consequence of the compound greed of individuals, institutions and nation states - individuals who sought more house than the house they can afford, institutions who bet on the demise of each other through the creation of debt default swaps and nation states who excessively accumulated foreign reserves which impaired the international economic adjustment process," he said.
"One would wonder if any lesson is learned and whether this kind of calamity will be repeated. The answer is no to both questions.
"Few lessons will be learned but soon forgotten and the whole story will be repeated, perhaps with different techniques and reasons."
"Human nature suffers from both greed and chronic insomnia," he added.
"With the Islamic financial system, those two symptoms are greatly dampened down.
"Greed is managed and rationed and insomnia is cured. All is done through the imperative existence of the everlasting Sharia rules and principles that must guide structures, and the execution of all financial instruments."
He said that he believed we were now seeing signs of recovery across the economic system, but the signs were not yet strong.
But he said that in the Islamic financial system he felt the sukuk market was strong and growing.
He added that while the numbers for this year's conference, with 435 delegates, was down on last year which attracted over 500, it was still a very strong showing with excellent speakers and people from more than 20 countries present.