Let me emphasize two things. Firstly, European countries must find a balance. They must strike a balance between the distribution of certain risks from the other and the benefit of a single jurisdiction. And I am talking about a real European banking market, capable of serving the economy reliably. Islamic finance, with an emphasis on participation and risk sharing, has characteristics that make it naturally stable. Traditional financing, based on debt and interest, has proved unstable. Hyman Philip Minsky, a leading American economist, called conventional financial instability “endogenous instability” because the conventional financial economy is going through a three-stage cycle: relative calm, speculation and fictitious expansion, then crisis and bankruptcy. The aspect of the bankruptcy of conventional financing is not limited to the private sector, as the recent Greek debt crisis shows; Governments can also expect bankruptcy. Recent historical analyses have shown that all financial, banking and monetary crises are ultimately debt crises. Recent widespread bankruptcies in many developing countries show that governments that have moved towards reasonable debt relative to their GDP have often been in an unsustainable spiral due to rising debt service obligations.
Many were with debts that were several times larger than the initial loans. Almost everyone agrees that the eurozone needs EDIS. However, some argue that it should start with a clean slate. The idea is to start by reducing risks in the banking sector before you start sharing them. But it`s not just a risk-sharing scheme through deposit guarantees. One of the key features of any integrated market is that it supports many positive risk-sharing channels. Banks could continue to develop cross-border lending and investors could, for example, continue to invest in shares of foreign companies. This would help spread the shocks that hit a country or region and make the market more stable. Let us now move from the European level to the global level, where fragmentation also remains a problem. We must try to avoid further fragmentation of global regulation. It is essential that Europe sticks to what it has committed to do in international for a.
It must faithfully implement the final Basel agreements, such as the fundamental revision of the trading portfolio. Historically, shareholdings have been created and registered as anonymous or anonymous companies. The shares were not necessarily available to the public on the stock markets and were primarily private contributions from entrepreneurs. In many countries, equity-owned companies continue to be created without necessarily resorting to stock market offers. However, with the spread of equity-financed enterprises, stock markets, as a form of organized exchange, have become an integral part of financial intermediation and for tracking savings for long-term investments. Stock markets, considered the best risk-sharing instruments, offer liquidity to listed stocks, as holders of listed shares may default on them if they need liquidity. In addition, the liquidity and attractiveness of equities has been enhanced by the spread of derivatives such as options and futures, which provide portfolio insurance that provides protection against bear markets. Thus, a protection rate protects against the decrease of shares.