Ep.107 - Is Islamic Banking Really Islamic? An Insider's view with Harris Irfan
Muslims worldwide have come to the realisation that the prevailing capitalist economic system does not serve us ethically. With its interest-based banking and casino-style financial instruments, a devout believer has no choice but to attempt to escape its haram, even if that hinders the progress and prosperity of our daily lives. In recent years, Islamic finance has been touted as an ethical alternative. A way to escape the haram riba based economy. Some have even presented it as an alternative to financial capitalism. The rationale behind these products is to accommodate the detailed Shariah rulings on trade and many Islamic scholars have endorsed products that Western financial institutes and governments have embraced.
Our guest this week was an Islamic finance industry insider. Harris Irfan is currently the CEO of Cordoba Capital Markets https://www.ccmkts.com. He has 29 years of investment banking and consulting experience. He was the former co-founder of Deutsche Bank's world-leading Islamic finance team and CEO of Deutsche's Islamic finance subsidiary. He is the Former Global Head of Islamic Finance at Barclays, and then Head of Investment Banking for the Rasmala group. He is also the author of "Heaven's Bankers: Inside the Hidden World of Islamic Finance", the critically acclaimed best-seller about the Islamic finance industry.
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Transcript
This transcript was computer generated. Please check the transcript against the programme for accuracy.
Muslims worldwide have come to the realization that the prevailing capitalist economic system does not serve us ethically with its interest-based banking Casino style financial instruments a devout believer has no choice but to attempt to escape its Haram even if that hinders the progress and prosperity of our daily lives. In recent years Islamic Finance has been touted as an ethical alternative a way to escape the Haram Riba-based economy some have even presented it as an alternative to financial capitalism. The rationale behind these products is to accommodate the detailed Sharia rulings on trade and Islamic scholars have endorsed products that Western Financial institutes and governments have embraced my guest today was an Islamic Finance industry Insider Harris Irfan is currently the CEO of Cordoba Capital markets he has 29 years of investment banking and Consulting experience, he was the former co-founder of Deutsche bank's World leading Islamic Finance team and CEO of Deutsche's Islamic Finance subsidiary he is the former Global head of Islamic Finance at Barclays then head of investment banking for the Russ Miller group, he is also the author of Heaven's Bankers inside the Hidden World of Islamic finance a critically acclaimed bestseller about the Islamic Finance industry. Harris Irfan Assalam alaykum wa rahmatullah and thank you for being at the Thinking Muslim,
Thank you for having me.
Well, it's great to have you with us now Harris I don't know if this is an exaggeration but you’re the man behind the Makkah Clock Tower why have you come to regret your part in finance in the tower; take me through your journey.
Well, that's a heck of an opening line and I the first thing I would say is that I'm not the man responsible for the micro Clock Tower unfortunately I do have a part to play in the project all right that was responsible for detonating the hills around Makkah into a billion Pebbles and historic old Forts and buildings and a lot of our history and in its place constructing what frankly is a monstrosity that dwarfs the reason for being there which is to visit the Kabbah so let me take a step back yeah. I was the first individual placed by Deutsche Bank on the ground in Dubai so I was sent on an expat assignment from the London office back in 2001 and the day I arrived or rather two days after I arrived 9/ 11 happened right and so there I am you know sitting in a service department trying to get my things together just having arrived in the country and I got a call from my wife saying switch on the TV and we watched these events unfold and of course what then followed was a huge repatriation of money back from the Western World to the gulf and therefore real estate stocks and other assets took off in price so naturally there was a lot of building work going on Deutsche Bank had just arrived in the region we were the first Investment Bank to set up in the Dubai International Financial Center and we were asked by a lot of clients who came to us and said well it's lovely that you're here Deutsche Bank but can you do these deals that we want to do on a Sharia compliant basis right and being investment bankers we know how to bag our way through anything and we said yeah sure but the reality was of course that nobody had ever done that kind of thing before so we actually learned at the foot of the major Scholars Sheikh Hussain Hamid Hassan who is considered by many to be the grandfather of modern Islamic Finance was the architect of our of our Sharia Financial program and one of the first deals we were asked to do was we were we were the first Western Investment Bank to be invited into the holy city of Makkah to do a real estate Sukuk, Sukuk is a type of Islamic Bond right or Capital markets instrument so a debt instrument that's listed on an exchange and so nobody had been asked this before and this is a pretty sophisticated piece of financial engineering yeah. So, of course it's very exciting for us and I was probably caught up as a junior Banker in that excitement that here we are we're going to finance the construction of a tower facing the Kaaba and it had been sold to us as this is a this is an amazing development people will be within you know 100 yards and maybe 50 yards of the mosque and you know it'll be a cutting edge building and it'll be iconic etc, etc,. of course, we never step back to think about socially what does this mean. I think when you are caught up in the era of financialization which is what's happening right now the financial economy is much more powerful and much more influential than the real economy the real economy is real goods and services it's your barber on the High Street it's a factory that makes widgets it's real goods and services apart from financial services that are being sold in the market yeah the financial economy is supposed to be those services that serve the real economy and lubricate the cogs of the real economy but it's become an industry in and of itself it serves itself it serves the people who run it serves the central Bankers which is something that I want to talk about today so when you're caught up in that use often don't see the long-term implications of what it is you're doing as a financial transaction so there we were very excited creating this complex Financial instrument listed on a on an exchange somewhere that would Finance it was actually the Safa Tower which is one of the seven towers of the Abraj Al Bait and I was one of the structurers which is basically a sort of financial engineer who creates the financial instrument that funds this development and all the while not realizing in my excitement that actually I'm participating in the destruction of my own Heritage and it's something that I look back on with great regret I think that it's something that would have happened inevitably whether I was there or not yeah but it's also something that I think should serve as a warning for Muslims generally and for people generally that this is the effect of financialization this is the effect of what I call High Time preference and that's something again that I want to talk about a bit later.
So, your basic argument is or your basic point about your days with Deutsche Bank is that you didn't consider the social impact the historical impact the Islamic moral impact of your decisions is that a is that a fair summary of your yeah so you work for Deutsche Bank and you argue that big investment Banks abuse a concept of Islamic Finance I mean how do they do this.
Well, I guess it pays to have a little bit of a history lesson here I would say that the probably the first instance of the modern Islamic Finance era is an experiment called the mythical experiment Mit Ghamr is a town about 80 miles from Cairo and an economist created a effectively a social Banker a social savings and investment Institution and depositors would put their money with the bank that money would be used to fund local industry directly and the profits would be shared with depositors right so this is a very pure form of Mudaraba.
Which is no Riba.
No Riba involved, no interest involved this is a split of profits and that's a real risk sharing real economy transaction which is very Islamic and that morphed eventually into a sort of social Bank social savings institution no I think there were eight other similar institutions in Egypt at the time and from there this was sort of proof of concept and from there in 1975 the first major Islamic Bank was formed in Dubai called Dubai Islamic Bank at the same time the Islamic Development Bank which is a multilateral institution was formed and now you see the development of commercial Islamic banking and at that point you need to be regulated as a bank by the relevant authorities and if you are to be regulated as a bank then you must be a fractional Reserve institution right what does that mean well it means that for every pound or dollar you deposit in the bank they have the right to lend out more than is deposited in the bank that's the fraction the fractional Reserve so for example they may lend out ten dollars for every one dollar that's deposited in other words they've created nine new dollars from nothing really; it's a form of alchemy it's money from nothing right so if you were to ask a sensible person who knew nothing about was not formally trained in economics yes what do you think of this they might reasonably conclude it's a form of fraud and yet this is perfectly lawful.
Do all banks do this?
All banks do this British Banks American Banks every Bank in the world that is regulated by a central bank is a fractional reserve institution.
Right, let me explore this fractional reserve either because when I first heard of it wasn't very long ago it just blew my mind right so okay I go to a Islamic Finance Institute and I say I want to buy a house so presumably they would lend me money from deposits so someone has excess surplus wealth and they want to keep that wealth safe and they put it into that Islamic Bank HSBC Oman or whatever it may be you're saying to me that it's not only the money the deposits that pay for my mortgage there's other money involved in that and this money is what just comes out of nowhere.
It is it I mean you could you could literally say that it is created at the stroke of a keyboard right click.
But why what why does this exist.
So, let's go back to gold in the 16th century if you had some gold and you wanted to store it safely yeah you would go to your local goldsmith and you'd say can you put this in your vault okay, and give me a piece of paper a receipt that shows that I have put some gold with you and he gives you put let's say you weigh five pounds worth of gold and you put it in the vault he gives you a piece of paper that says I owe you five pounds of gold right all well and good now you know that this is evidence that you own this and it so happens that the Goldsmith has a good standing in the community everybody respects him to know he's an upstanding guy he's a safe guy and he's good for his word so you can actually circulate this piece of paper in the economy as money because it evidences that you actually own five pounds of gold or you can have it divisible you can give you five pieces that say I owe you one pound right now again this is all very good but at some point the goldman, the goldsmith says: wait a minute this guy who's deposited money with me never comes back to redeem his gold so I could actually issue more pieces of paper than I actually have deposits now he's created a fractional reserve right so the practice became that he would issue more receipts into the economy and it was it was made legal and eventually we saw institutions like Bank of England which effectively codified this and institutionalized this process so it was possible for a bank to maintain a reserve but to issue more money that were done was actually stored in its vaults and this is the origins of the fractional Reserve System now as long as the government found some way to regulate the amount of money that's in circulation everybody believes this is all well and good an increase of money supply and the economy means more credit creation means more wealth creation means more jobs means more growth in the economy yeah and we now have a situation where the controls are so loose that this financial economy has far outstripped the real economy and every now and then there's a crash every now and then things get too impossible to control and we have crashes like the 2007-2008 crisis yes and in such a case you will see lines of people outside Bank saying no something's gone wrong I want my money back in fact we saw it very recently with Silicon Valley Bank except the crash happened much faster this time because it was no longer about neighbors in the street saying to each other hey have you heard about our local bank and what's happening we better run to the bank or catch the bus or whatever and get there and stand in a queue and redeem our money yeah now you get on your mobile phone app and you just say I'll have my money back thank you very much because I heard a rumor on Reddit that it was about to crash right so now we have runs on a bank that can happen instantaneously and this is a function of the fractional Reserve System.
So, this fractional Reserve banking underpins all Islamic banking, all banks including Islamic right so what does that then mean for the Islamic quality of these products like what are you what's your argument about Islamic quality of say an amount of finance mortgage.
Yeah, there was a time that I felt and this was going back 20 years when I started the Islamic Finance team at Deutsche Bank yeah that I felt that if you're a practicing Muslim and you're ideologically aligned with your faith and you wanted to invest in a way that didn't compromise your principles and you wanted to offer Financial products to other Muslims and to people who wanted to invest and participate in the economy in a Halal way in an ethical way whether or not they were Muslim I used to think it was possible to do that and we actually had a bunch of Bankers who are working at places like Deutsche Bank who were young practicing Muslims technically capable ideologically aligned and they were creating some very interesting products but we never really stepped back to think actually what is the fundamental basis on which we are manufacturing this product because it's all very well that we've mastered the elements of Fiqh al mu’amalat, the jurisprudence of transactions of commercial and financial transactions so that we can create this complex contractual structures that we call mudaraba, musharaka, murabaha and so on, and we have these contracts that we vetted by theologians for compliance with Sharia and we say yeah this contract I'm using to finance the building of a house or financing the purchase of a home through a mortgage is Sharia compliant because the contracts are in a jarrah where the diminishing musharaka or some other combination well we don't step back and think hang on what's the basis on which this bank is able to give money for the financing of this house basis is money creation through the fractional Reserve System so again every time you deposit a dollar in the bank and they can lend ten dollars they've created nine new dollars or new money which is the definition of Riba, because you've created money from nothing or money out of money that's an excess that's a surplus that's how Riba is defined. So, the entire banking system is by definition based on Riba and if you have Sharia compliant contractual structures on top of that Foundation you still have a non-compliance system so as much as I tried to convince myself for many years and this is a form of cognitive dissonance that we can do this we can do it better and we can make it Halal actually Islamic banking is an oxymoron because you cannot meet Islamic and be a bank because a bank is a fractional Reserve institution that creates money from nothing which is Riba.
I mean that's outstanding, I mean so a person who today wants to purchase a house, a Muslim living in Britain who wants to purchase a house are you saying that they should regard all Islamic Banks Islamic Finance instruments in the same way as a as a traditional High Street Bank as a Riba-based bank and so these Banks and these instruments are Haram.
Well, here again I demonstrate some cognitive dissonance and it's very difficult for me to say that that is the case yeah first of all is there a viable alternative today I don't believe that there is secondly other many Muslims working in the Islamic Finance industry who are trying to develop a more wholesome product yeah not just Halal but Tayyib, not just permissible but wholesome right and the answer is yes there are many Muslims that in that industry and I also believe in supporting them to achieve those objectives.
So, these Muslims are creating the equivalent Financial products without the fractional Reserve no under the hood they are they're within the banks yeah they still have fractional Reserve under the hood okay but there are many Muslims now who are creating new startup Islamic fintech firms right who are trying to create Financial investment products and financial financing products which are not just contractually to the letter of the law but also within the spirit of the law I.E not based on a fractional Reserve System right but that's a very tiny minority so I would say that we should as Muslims support the Islamic Finance industry but we should be very discerning about what we choose to support and choose to walk away from now having said that if I want to finance my house I have very few alternatives and even I have used an Islamic Bank to get a mortgage because I felt that the alternative would be to go to a large High Street Bank who have no interest in or affinity in affinity with Muslims or the Halal economy so I would rather support those who do have an interest in that and are trying to move in the right direction unfortunately again it's cognitive dissonance unfortunately I don't really feel I feel like in topple with the main character says on the other hand on the other hand I'm in my mind I'm constantly trying to reconcile my actions with the reality of what's actually happening and I would I used to champion the Islamic financing to particularly Islamic banking industry for a long time for many years until very recently but I now feel that it's so stagnant it's so unwilling to change from the inside and I've tried to change it from the inside right that I can no longer hand on heart say that I can continue to support the Islamic banking industry and I would like the Islamic Finance industry more widely to move towards its ideals of a risk-sharing real Economy based Services industry now we're a long way from that and I think a lot of what young entrepreneurs are doing now to create fintech companies Islamic fintech companies is a good step towards that ultimate aim but I think we're a long way from that.
And from a regulatory perspective are they allowed to do that can you set up Islamic purely Islamic financial instruments but are not based on this fractional Reserve banking.
Yes, you can do that, it would be effectively 100 Reserve institution so every pound that gets deposited yeah a pound has invested somewhere else right and it's not lent somewhere else yeah interest it is actually invested somewhere else okay now naturally that that's a key point because unfortunately I see very few Islamic fintech firms who act as financing firms who do Finance businesses on a risk sharing basis many of them use a form of contractual structure called commodity murabaha and it doesn't really matter what that means but let me give you an analogy in the Middle Ages of course the church band usury usually was forbidden in Christianity always has been and the way that financiers would circumvent that in the Middle Ages was to say well what if I took this contract and this contract and this contract three different contracts each with different aims and so it was called contractum trinius and each of them was not alone with interest but when I put them together they effectively allow me to lend and get interest in return now the church at the time said well these contracts are not in and of themselves non-compliant with church law so no problem you carry on which is exactly what's happening and hence we now see the development of modern Financial Services industry and even the church itself has turned a blind eye to interest by I think 1917 the Vatican themselves were investing in interest bearing bonds on their balance sheet so that creeping normalization of usury has meant that original Church law has been completely disregarded and I fear that's what the Islamic Finance industry has been doing for the last 60 years since the Mit Ghamr experiment in Egypt.
Yeah, so you mentioned a couple of times a risk sharing…What is that? sort of explain that.
Okay so if you're a business and you want to raise money let's say working capital I'll give you a specific example actually I've just closed the transaction with an international agri-business and it so happened that the CFO of this business was a Muslim although the business is not Halal specifically certified as Halal in any way yeah although the product that they sell which happens to be Brazil nuts is Halal yeah and he said look this company I don't wanna put debt on its balance sheet I want to burden it with security and collateral and a burden for its future running nor do I want to dilute the equity of this business and bring in new shareholders so how do I raise working capital for this business so I can buy raw material process them in my factories and sell them in the market and together we worked on a form of instrument that we call a profit participating note so in format it's a little bit like a bond because it gets listed on an exchange but in practice what happens is the investors who put money into this bond are actually participating in the financing of the business so that money is directly used to purchase a raw material which happens to be raw Brazil nuts in a factory in South America it's processed in that factory it's packaged and shipped and the profits are then sold are then shared between the investor and the company that's a pure risk sharing structure the investors are now participating in the activities of that company they're not guaranteed a return they're not guaranteed an interest rate but it so happens they're doing pretty well they're earning low double-digit returns that's their yield so this is a perfect example of a real economy risk sharing financial instruments.
So, they could lose all of that money.
In theory they could the I think the beauty of doing financing in this way is that as a financier you take much more care in doing due diligence on the activities of the company you live and breathe what they do I mean the CFO and I have been talking constantly every day for past year and a half I think and that's not what Bankers would do bankers don't care what's what happens next because if it goes wrong they'll repossess everything you own and take the shirt off your back whereas I as a financier do care what the business does so I am much more heavily aligned with the business I'm incentivized to make sure that they do well if they do well I do well my investors do well the economy does well this is a much more wholesome and ethical way to run an economy today because of financialization I mean financialization has led to the monster of inflation because we have this cheap debt borrow spend consume model and what was what we call QE quantitative easing is very colloquially I'll call it money printing it's not actually money printing it's impressive it's the press of a button yeah where a central bank increases the bank reserves in their accounts Banks now have more money to spend on or they can lend it long-term interest rates decrease over time as a result of QE in and consumers and now in incentivized to borrow a spend consume and so we buy stupid things that we don't need we change our mobile phones the Apple 23 for the Apple 24 or whatever it is that we don't need to change every year but we do, we change the car on our driveway every year with a new PCP agreement yeah you know we refurb our homes because we can we can extract equity from our homes at low interest rates so this is a form of financial Insanity we're desertifying our planet we're polluting our planet, we don't discipline our Nafs, we don't. We don't practice Sabr, we don't practice deferred gratification we don't invest for our future we just borrow spend consume that's what we do today we have high time preference. So, as a result we are in this cycle whereby we borrow as much as we can and bankers don't care who they lend to anymore they don't do the due diligence on how they lend and venture capitalists when they invest in a business because inflation is so high money sitting in a bank account is just devaluing at 10 per annum so throw it away throw it into businesses that don't make any sense you hear the word blockchain metaverse you know web 3.0 and that's the new buzzword let's invest in that throw money at it doesn't matter what it does it's the new whatever so I think we are in a financial economy that encourages poor financial decision making I think if we returned to a real economy risk sharing basis on which the finance businesses we would have a much more measured and calculated process whereby the financier is fully aligned with the financee, the one who is receiving the money, it's not a borrower lender relationship anymore it's a partnership arrangement in fact musharaka is a form of financial contract in Islamic Finance which means partnership; mudaraba is also a type of arrangement, Prophet Muhammad saws itself was a mudarib because he took in capital from people who had capital the rab al maal, the lord of the debt and he was the mudarib the manager of the money and he would invested into caravans and manage that capital and then split the profits with the rab al maal man, with the owner of the capital in a real economy risk-sharing way so I'm a firm believer that Islamic Finance is to be successful and true to its roots it has to reflect that same risk sharing mudaraba model whereby I as the manager of money am a true mudarib and I have an amana, I have there's a trust on me to make sure that the business is successful not that I walk away and say I want security and collateral and I want and this is this is what happened in the Middle Ages debt peonage eventually I would take collateral in the form of human beings slavery becomes a way of life so this is a move away from that.
Right, I may sound very pretentious here Harris but a relative of mine said I've got like a spare hundred thousand pounds like it's in the bank yeah I can't take interest so he's just sitting in the bank inflation is cutting into that money year on year what do I do with the money so they've come to me to ask me where for a for some advice and I haven't got a clue about Islamic Finance or Finance in general and so what would you advise such I'm sure you have lots of people who come to you and suggest and ask for your advice like what would they do.
Yeah it's a very difficult question to answer because we don't yet have trusted institutions who can manage money in such a way and I'm in the lucky very fortunate situation where I've been an intrinsic part of this industry for over two decades so I know where to go if I want to invest my pension for example most people don't we're beginning to see the green shoots of these early-stage Islamic Finance Islamic fintech companies okay that offer investment platforms.
Now, what's fintech, what's…
Fintech is financial technology okay so you may have used mobile app-based services like Monzo and Revolut exactly right yeah so you use your mobile phone now to make contactless purchases and via your bank account and do foreign exchange and so on and that's really Financial technology it's a move away from Traditional High Street banking right you go into a branch and you talk to your bank manager sure there's a place for both but fintech has allowed the financial services industry to develop at a much faster pace yeah and it meets the needs of the modern you know Millennial and gen Z generation yeah so these fintech companies are starting to establish platforms which allow Muslims and people who want to invest in an ethical way to find Halal and ethical product there's a snag the snag is that there aren't very many investment products out there and a lot of investment products and financing products are being touted as Halal but still have this commodity mubaraha, remember that discussion we had about contract and trinius the modern version yeah they still have this contract mubaraha commodity sometimes called tawarruq if you see those words in the small print run a mile really because as far as I'm concerned that's a form of deception we're trying to fool God into believing that this fancy contractual structuring on pieces of paper somehow makes this financial instrument Halal and I'm very disturbed to note that a lot of new Islamic fintech companies are jumping on this bandwagon of let's create a new Islamic fintech company and capture this new market because people are moving away from Islamic Banks and traditional Banking and what they're doing is trying to replicate what the banks already do which is either fractional Reserve or using contractual structures like commodity mubaraha, once again remember those words if you see that in the small print as far as I'm concerned that's a deception.
Harris there are many scholars Islamic scholars of high repute who endorse these products and some of them sit on the boards of these Islamic finance companies, are you in effect saying but with Islam is Scholars have all got it wrong?
I'm not saying that because all the vast majority of Scholars in this industry that I've met and I know are first of all highly competent individuals and secondly individuals with a high degree of integrity so I certainly wouldn't say that what I would say is that they are captive to the system right much like economists are and perhaps in some cases they can't really see beyond that narrow focus that they have right and in order to stay employed they appear to have little choice but to endorse the products that currently exist; the second thing I would say about that is in many cases they have put provisors on these products which are often ignored so for example in the case of commodity murabaha which is often described as tawarruq by many banks it's not important what the specifics are of the of the transactions involved in it but basically it's a case of smoke and mirrors so you will have for example a lot of metal being traded on metals exchange between different parties and what the scholars say particularly if you look at the standards published by an industry body called aofi they say as long as it is not organized tawarruq meaning that the buyers and sellers of these metals on an exchange have not been fixed and organized in advance predetermined in advance it's a Halal transaction and that is actually true I agree with that okay despite my reservations on commodity murabaha actually that is a correct assessment in my opinion the problem is that all the banks practice organized tawarruq so they have a Fatwa for one thing then they practice something else really and that is my problem with that.
So why don't be Scholars discuss that and you know object to their name being used besides these products that are problematic?
It has happened, there's a very famous case in 2011 I was approached by Goldman Sachs to launch to help them launch a Sukuk, an Islamic Bond well and it would have been a large transaction I think one or two billion dollars or so and they said I said well that's interesting I'm willing to act as a consultant on this project I was in a Consulting role at the time and they said and I said okay first of all what formal structure are we going to use here contractual structure and they said commodity murabaha yeah. I said that's problematic let's go down a different route they said no we have to go down this route because we've already got pre-approval internal I said okay but there are many provisors if you use this and that's the only basis I can work on this and I said first of all what's the money going to be used for they said and these literally are their words don't ask too many questions I said whoa I'm out of here that's the Goodman Sacramento I cannot work on something where you don't even want investors to know how the money is going to be used well that's an absolute you know red flag for Muslim investors for Halal investors right so they went ahead and tried to use this structure and they tried to launch it and predictably it was a failure it's the only time there's been a benchmark size meaning sort of billion dollar size Sukuk in the international markets that has failed. Goldman Sachs failed to Launch and many of the scholars who involved in that had their names attached to the offering document to investors said well I didn't say that I spoke to them in private I spoke to a number of them in private said no I didn't say that right and I didn't sign up to this document and I said in my in our meetings with these Bankers I said no this can only work if you do X Y and Z and they didn't follow x y and z so what we see in public is not what necessarily happens in private and there are many instances I've had many conversations with Scholars who feel that their views will not adequately reflected in the final product so when I used to work with Sheikh Mohammed Hussain he used to he used to use the analogy of I'm a doctor he would say and if the patient comes to me with an illness if I don't have a full reading of his history and symptoms I cannot give a solution right you have to divulge all the information on this transaction to me before I can apply on it and work with you as the architect and that's a that's a principle that we followed with Sheikh Hussain and it's why I believe we were success successful at the time now other things happened after that which we can talk about later which led to a spoiling of the market but in general I feel that it's important that when bankers and financiers work with Scholars that they work with them from day one not at the 11th hour and suddenly go out to them and say hey where the magic Wando with this transaction and call it Sharia compliant that's not going to happen yeah or they don't have them intimately involved in every detail of the financial transaction.
That's interesting I mean how much can we blame Scholars I mean I've often come across very good Scholars who understand the reality as we know one of the requirements of issuing a fatwa or making ishtihad is Tahqiq al manar understanding the reality and I know some Scholars who really go out of their way to understand the reality in great death but then there are other Scholars who just don't appreciate the reality or rely on third parties to explain the reality to them because of course the quality of their Islamic verdict is going to be dependent on how well they understand in your case fractional Reserve Banking and what comes under the hood of these Islamic Finance products I mean have you come across Scholars who investigate on their own who really try to inquire about the details of a product because often there is a blame on some Scholars for not doing that.
Yes I have, first of all most of the scholars that I work with would generally be considered to be you know highly competent and understand stand the detailed mechanics of financial modern financial instruments right they tend to have a view on certain things such as the role of commodity Murabaha particularly in developing the financial services industry in the 1980s when it is modern Financial instrument starters started to come through and they said at the time we will allow this structure to be used for an interim period so that you have a foothold so that Islamic Finance develops unfortunately that just became the default for the next 40 years right so that's a shame regarding Scholars who really go to the nth degree I mean I have come across a young Dynamic Scholars who are engaged in business themselves right today who are at the Forefront of some of the recent Innovations in for example cryptocurrency and Bitcoin and so on and whilst we've had some non-technical Scholars social media Scholars I call them who have given fatawa on you know Bitcoin is Haram because and then a whole bunch of propaganda which is frankly nonsense which clearly shows they haven't understood either Bitcoin or modern Financial system or the modern economical monetary system right in contrast is Young dynamic technically able Scholars have dissected a complex subject like cryptocurrency and understood it to its Nth Degree and read the white papers and really participated in the industry and say hang on actually there are aspects of this that may be Halal for this this and this reason yeah and they talk through it very you know productively and in a detailed way.
So, tell me about the Doomsday fatwa.
Yeah so shortly after the Mecca Tower project when Deutsche Bank had established a foothold in the Middle East we created a the atomic bomb of the industry hence why I call it the Manhattan Project and this was a particular technique that my team at Deutsche Bank created yeah to replicate the financial return from any Financial instrument whatsoever so think of the most Haram thing that you can think of pork belly futures right we could replicate the return through what's called a total return swap of pork belly Futures and give that as an apparently Halal return right to an Islamic investor through what's called an organized vehicle yeah it's a way of distancing the investor from the underlying asset far away from them okay in the middle you've got this black box that swaps away the return of the Haram instrument and gives them the return of something else that they legally own so the black box contains a perfectly Halal asset it might be metals on an exchange copper on the London metal exchange right that's what they own legally and yet the Investment Bank Deutsche Bank swaps away the return in this black box and gives them the return of something else which is specified on our terms and conditions sheet so we were able to create all kinds of exotic investment products what we call structured investment products and these are typically the kind of things that high net worth individuals with Swiss bank accounts would invest in all kinds of very highly complex derivative instruments now one of the reasons why we created this remember going back 20 years yeah the Deutsche Bank team was young Dynamic Muslims practicing Muslims who wanted to do the right thing one of the reasons why we created this technology is atomic bomb was to harness the power of atomic energy which can be used for good things and bad things and so we wanted to actually create a hedging platform what do I mean by hedging well if you're a business that manufactures a product and sells in different markets around the world and all of your costs are in Euros but all your revenues are in dollars you have an exchange rate risk right so you need to hedge that foreign exchange risk you need to make sure that you are not hemorrhaging money when your currency plummets in value and your costs become much higher than your revenues that's a legitimate reason to hedge your head your business risks so we created this platform in order to create a hedging instrument and a treasury management platform so people can hedge against macroeconomic risks like commodity prices or you know foreign exchange rates that's a good purpose unfortunately the generic fatwa that we had issued off the back of this black box technology could be used to create all kinds of crazy products because we could replicate the return of anything through a total return swap so there are you know there we are our sales guys are running a mock like rambos firing guns everywhere throughout the Middle East selling exotic interest rate derivative products some you know not literally pork belly Futures but that kind of thing it all came to a head when there was a press conference given by my then boss who sat alongside I think was some Goldman Sachs hedge fund type guy and it was four I think a hedge fund managed by Goldman Sachs and this black box was issuing a Sharia compliant structured note which replicated the return of that hedge fund and my boss made a very interesting comment to the Press at the time he said we meaning Deutsche Bank will create conservative products for conservative customers and aggressive products for aggressive customers which is the worst thing you can say right when all the Muslim world is watching this saying yeah we can create alcohol that's kind of you know not alcohol and kind of is alcohol and we can make it Halal guys please this is the wrong thing that's what happens when you have Islamic finance that run that's run by non-Muslims wow they don't understand they never live that experience never sat in our you know they never walked in our shoes yes and they don't realize that's the kind of comment that can get you into a lot of trouble and that did cause a lot of trouble and a scholar at the time a guy called Yusuf De Lorenzo heavily criticized in public in an open letter to Sheikh Hussain Hamid Hassan who was as I say The Godfather of the modern Islamic Finance industry in our the architect of our product and he said that you're making a huge mistake here you have created the Doomsday fatwa which kind of ties in with the whole Manhattan Project image yeah and you know this is this will wreak havoc in the Islamic Finance industry and he was right I mean all sorts of devious products were created off the back of this technique was saying quite lightly I mean initially there was quite a spat between the scholars as you can imagine but eventually you know um they dealt with it in a very scholarly way and Sheikh Hussein made sure that subsequently any product that was issued off the back of this platform had to go through him even the marketing even the wording of any adverts that were used to describe a product he had to see it and he had to vet it and from now on it could only be used to reflect underlings which were not repugnant to Sharia.
All right, so when I listened to you I think of where I live there is a chicken and chip shop it serves amazing chicken but everyone knows it's a cash only business everyone knows it's a cover for money laundering they make their money through illicit work and they wash it out if we said in chicken and it's actually really good I have to say if you ever in my neck of the words I'll take you there but no one says it's Halal you know the imams of the mosque condemn it the business owner probably knows what he's doing is wrong but it seems like in your universe or at least the universe used to live within anything can just become Halal is that an exaggeration.
I am reminded of a comment that was made to me by the CEO of an Islamic fintech firm yeah about a year ago he said to me and I'm only quoting his words saying nobody sue me please he said to me he thought that the manner in which Islamic banks in the UK were hemorrhaging money and bear in mind that over a 15-year period they have made 200 million pounds of losses despite being a monopoly position despite being very favorable economic conditions that's the loss they've made cumulatively over 15 years yeah. He said it looks to me like a form of political money laundering because it's as if a government decided overseas somewhere someone said I have a hundred million dollars burning a hole in my pocket I need to spend it buy me a bank in London make it Halal make it sure compliant get me whatever stamp I need and then it doesn't really matter to me the quality of people that I have or the products that I put out there will make the right noises to the regulator we'll say that we'll serve the Muslims underserved Muslims Somalis in Birmingham Bangladesh is in East London Pakistanis in in Manchester and we'll give them Halal product I really we don't care again these are not my words yes he said to me it really does feel like a sort of offset program where one party decides to say I'll put some money into you if you put some money into me right and we'll just wash it through the system right that's what the Islamic banking industry feels like to him I'm not saying what it feels like to me in this country and it does feel to me as there's a lack of authenticity and when you look at the senior management not one of the CEOs of the British Islamic Banks there's five of them in this country is an Islamic Banker by original trade they're conventional bankers they're non-Muslims they don't really have a shared experience with people like me and you they didn't look like me or you and it's no wonder that as a lack of their as a result of the lack of their cultural affinity with the people they serve they don't know what their the customers want the customers complain they say oh yeah I went to so and so bank and I tried to get a mortgage but it was more expensive than you know HSBC or Lloyds or whatever and they had these fancy Arabic words but it just seems to be the same thing as me with the word interest crossed out and the word profit put in and I sympathize with that they haven't won hearts and minds of their customers yeah and what I'm trying to do now in the industry is if it's a lonely battle because it seems very few people want to do it yeah what I'm trying to do is create a true alternative to what the Islamic Banks do but getting funding for that is it's a very anti-establishment product so the Islamic fintech firms that are trying to do this thing have a they don't have access to Capital and at some point somebody will wake up it'll probably be a non-Muslim VC firm that will wake up and then we'll say wait a minute this is a market of two billion people and they're completely underserved and they're being sold a deceptive product and they intuitively know that it's a deceptive product and they know not to buy that product in the UK for example there's only a two percent penetration rate wow of all Muslim households using an Islamic Bank account that's a ridiculously small number given a monopoly position and given the heinousness
of the crime of Riba in Islam yeah, it's one of the most it's alongside Shirk and murder, Riba we don't even think about that yeah how many footballs have there been in mosques about Riba almost I can't remember a sickle one not a single one and that really upsets me so we need to get that message out there we need to tell people that there is an alternative and you need to support those Alternatives you need to clamor for change because the current crop of Islamic banks have not brought that change and they're not serving our communities.
And that message is coming through loud and clear yet we do have governments passing legislation to accommodate the contemporary Islamic banking scene I mean I was amazed to hear that Russia very recently and Russia doesn't have a very favorable let's say it's viewed towards Muslims as being quite problematic over the last decade or two yet it recently changes legislation to accommodate Islamic banking. I mean what's going on there?
You know, I'm actually not very hopeful and the reason why I'm not hopeful in general is because whenever I see new legislation to accommodate Islamic Finance it's almost always to accommodate Banking and therefore it's accommodating a fractional Reserve System it's just supporting that system right so it's not a true in my opinion Tayyib, wholesome alternative to interest-based fractional Reserve banking right and as long as we kind of I guess tweaking the edges of the regulatory system adding a couple of little laws here and there to accommodate Islamic products within Banks I don't think we're really going to move the needle if we want to move that needle actually we have to tear up the rule book and say no it's not real Islamic Finance is about this it's about the real economy real jobs real businesses it's about Finance being the servant to the real economy which is the master and at the at the moment it's the other way around so I although you know I work with regulators I work with government bodies and I'm appreciative of the efforts that they make I don't think that they truly understand what it is Muslim customers want and need and it will take some breakthrough product I hope insha’Allah it's mine I hope people make Dua for it I would really like it to be mine but I'm happy if it's somebody else's it will make it will take somebody's breakthrough product to demonstrate that we can Finance businesses in a totally Halal and tayyib way and be commercially successful insha’Allah. So, it will take that breakthrough product before people say wait a minute this is what we needed all the time why have we been talking about banking all the time that's not Finance that's not the roots of trade in Islam yes Traders Halal, Riba is Haram we know that so let's go back to trade.
Fantastic, May Allah make it successful.
Insha’Allah.
Earlier on when you talked about the Clock Tower you said that it contravened it may have followed the letter of the law at least the transactions may follow the letter of the law, but it contravened some of the goals of the Sharia or some of the aims of the Sharia can you expand on that what do you mean by the aims of Sharia.
I think this is coming back to spirit of the law versus letter of the law we we drafted very complex contracts that contractually met the constraints of Fiqh mu’amalat but actually when we step back we had not taken into account the social implications the objectives of Sharia yeah and the objectives of Sharia mean that we need to be more holistic in our thinking right so whilst we may have ticked the boxes that this contract met certain criteria we didn't think to ourselves is this good for us is this good for Muslims is this good for Humanity is the fact that we destroyed all the hills around the city and pieces of our history is that good for us yes is the fact that we chased short-term profits over long-term gains good for us is the fact that we demonstrated high time preference over deferred gratification load time preference good for us is the fact that rewarded we rewarded a small group of people who sit at the top with access to money preferentially when it's printed good for us. So, I think that we're in a situation where the financialization of the economy has benefited people who sit at the very top so for example when a central bank decides to print more money QE quantitative easing means that the more money in circulation means that the value of money has diluted we've reduced our purchasing power so those who sit close to the money spigot this tap this faucet of money pouring out of a central bank the financiers the central bankers the rich people at the top of the tree who get access to the cash before anybody else can get rich because they can buy assets and asset values go up stock real estate art vintage cars these all go up in value and they become richer as a result but by the time that money is trickled down to the rest of us people on you know lower wages who are struggling to make ends meet their wages haven't increased but the cost of everything has increased now in this country it's nine or ten percent per annum so that's why we have a cost of living crisis and we can pretend that it was the Ukraine war we can pretend that it was Brexit we could no but the real reason is money supply increase that is always the reason for societal decline which is a very bold statement to be making but if you look back in history any time that we have been, we have had a gold standing is sound money we have had periods of history that are characterized by peace, by stability by moments of scientific and cultural breakthrough. So, we look at the Islamic dinar the Golden Age of Islam for 700 years, we look at the height of Rome Byzantium we look at the second half of the 19th century these are periods when the world experienced a gold standard and trade was borderless and fluid minimal tariffs we had time for humankind to advance scientifically and creatively and culturally we advanced humanity when we were on a gold standard in contrast ever since Roosevelt's expropriated citizens gold reserves from 1933 onwards, and Nixon removed the gold peg in 1971 we have had a massive decline a massive increase rather in inequality between rich and poor we have an unequal society we've also not coincidentally but directly as a result had the most environmentally polluting and bloodiest century in history we've mechanized warfare we have allowed governments to finance a state of perpetual infinite war because no longer can they exhaust their own coffers their own treasury to finance war yes they can now exhaust the wealth of you and me and everybody in the country by inflating by printing money and that's why Nixon depict different goal in 1971 to finance the Vietnam War and now we had been as we have been in a state of perpetual war since then so having an unsound Fiat money Fiat money is money that had decreed to be so by a government so that's dollars pounds Euro, Yen, etc., and unsound money is one that can be printed at will that is pro-inflation that is pro-Riba, that is pro-war that is pro-environmental pollution that is all of those things that increase GDP this one blunt measure gross domestic product that we think measures human progress we say GDP has gone up and everybody says yay GDP has gone up we've done a great job guys but GDP does not measure human happiness literacy rates suicide rates divorce rates it measures the exchange value of goods and services not the experiential value of human life of animal life of plant life of this planet's life. So, Fiat money has directly contributed to climate change for example is my belief and I mean I think there are strong arguments in favor of a return to what I call a sound money I think gold is impractical and I have come to believe that Bitcoin is the most Sharia compliant form of money ever invented in the history of humanity and that is that is what I advocate now.
We had a discussion about Bitcoin on a previous show with you but it seems to me that your criticism is actually a criticism of capitalism it's a criticism where capitalism has led us and the stage of capitalism we're at is creating this boom and bust economy an economy of inequality and economy which loses sight of some of the sublime objectives human societies should be seeking so it's a very wholesale criticism and I suppose the counter argument or at least I'm going to say it in my comments section will be from some Muslims who say well wait a minute are you not Harris just read do you not have a problem with trade and the problem with profit a problem with wealth creation are you just endorsing a islamically tinged socialist type of economy which puts which, which puts the brakes on the type of wealth creation that capitalism has undoubtedly created in the last in the last century.
I am not, I strongly believe in free markets I strongly believe in wealth creation right if done in a way that accords with the law of Allah and in fact there is a very famous Hadith about price fixing. So, prices of commodities were shooting up and the people approached Prophet saws and they asked him to fix prices, and he says I will not do it because it is Allah who is responsible for prices right, and he did not want to be responsible for performing an injustice on the people for which he would have to answer on the day of judgment. Every experiment that we have seen and in extreme forms it's taken the form of Communism for example where we attempt to fix financial model or commodity markets or fixed prices or fix the economy or centrally plan the economy has resulted in disaster yes in mass starvation even clearly that is not the system that Allah intends us to use similarly the modern form of capitalism is not capitalism as I define it it's capitalism on steroids it's turbocharged it's intended to benefit a very few people at the very top capitalism is a good thing capitalism is a fair distribution of wealth of wealth creation across all levels of society everyone can have a basic decent standard of living and a closure of the inequality gap I believe capitalism is something that Allah actually wants us to do, He wants us to create wealth in a good way and use it in a good way and there are checks and balances there we have to protect the weak and vulnerable there are Hadith about not meeting the traders, the caravans outside the city limits so that you you're not able to advance take advantage of prices in bulk before the commodities reach the marketplace this is a form of protecting the consumer there is a famous example of Imam Abu Hanifa who he was he owned a textile shop in Kufa he was a textile trader and a woman came to him with a piece of cloth I think it was silk, and she said to him I would like to sell you this cloth, how much will you give me for it he says how much do you want she said a hundred was it Dirhams, I think it was Dirhams, he says no it's worth much more than that which is an amazing thing to say I mean why would you as a trader say no I'm going to pay you more I said no so he didn't want to deceive the woman he had he had superior knowledge he had the advantage of being an expert in that field and the woman was vulnerable because she was not right he could not take advantage of that and she said okay 200, he said no eventually they settled on 400 I believe, which is a huge change from where she was originally yeah but that's an idea of protecting the weak and vulnerable and that's inherent in our in our trade structure in our Fiqh al mua’malat.
But that's not capitalism, I mean capitalism is laissez-faire as we understand it it's…
If you define capitalism as profit for the benefit only of shareholders the pursuit of profit only for a small group of people who are the holders of the capital the shareholders then that's what modern capitalism is but capitalism causing according to Islam is not that it is the free pursuit of profit in any field that is Halal without fixing prices, within certain boundaries such as lack of exploitation of people who do not have knowledge or who are vulnerable or who are who are weak. So, within Islamic capitalist system we have institutions like Endowments alqaf, we have institution of Zakat, the wealth tax we have other institutions that allow us to ensure that everybody is protected at every level of society, and I firmly believe that if we had implemented those rules that we would not have the level of inequality that we have in society today.
I mean I agree with everything you've just said there in terms of the dynamics of an Islamic economy and how it functions, but I suppose it it's I feel somewhat reluctant to label that an Islamic capitalist system because if it kept for me capitalism is fundamentally without restraints it's without State control it's about State intervention of course you know if you're going to regulate the characters…
What is the good thing about State intervention though?
Well, you're right in saying that there are some aspects of State intervention the Socialists ways of you know of commanding production and supplies highly problematic from an Islamic perspective I completely agree with that but just as simple Hadith you mentioned about how do we prevent some traders accessing the caravan before it enters Medina you know there's going to have to be some form of stage regulation.
Zakat.
Zakat over the last you know before the demise of the Ottoman Caliphate after demise of the Ottoman Caliphate where we didn't have a centralized government and Islamic government before then we used to have the regulation of Zakat was a in effect attacks it's not a tax but it's a tax being paid to a tax collector and the central government would dispose of those funds to the categories mentioned in Command right and because they've got the bird's eye view and they can allocate those really important charitable resources to the right people. So, in Islam there isn't there's a strong element not a socialist for sure but a strong governmental component within the economy now we can debate and I'm sure Scholars debate how much should the government intervene you know in the case of price fixing very little yeah but you know there is a necessary role for government whereas my understanding of capitalism and to be honest I'm not an economist but my understanding of capitalism is that it is very much about leaving any form of government interaction in the economy is a narration.
I think that's a modern interpretation of capitalism yeah I think a classical interpretation would be very different you're quite right that a trusted authority of some kind is required to ensure that laws are followed and there are checks and balances and the weak and vulnerable are protected of course 100 agree yes yeah exactly on the other hand there are certain things I believe that should be separated from State and money is one of those things I firmly believe that money itself this medium of exchange this unit of account the store of value should not be regulated by a government it's too important for a small group of people who don't have infinite knowledge of things right to be able to regulate and we have consistently seen central banks and governments make a pig's ear of regulating money monetary authorities have consistently messed this up we've seen it throughout history particularly in the last hundred years the moment you allow a government to for example Nero club and Emperor Nero clipped a gram of the I think was an eight gram coin of gold at the time right and you can probably chart the decline of the Roman Empire from that point because at some point you end up in a spiral of lawlessness of riots in the streets and people not being able to afford bread right and that is what happens to all Empires ultimately when they start to devalue their currency because they knew or they thought they could get away with financing whatever white elephant or war that it is that wanted to finance so I firmly believe that money should be separated from the state and that's why I believe in a decentralized form of money as gold was once when we had a gold standard but it is really no longer it's too impractical which is why again I come back to the idea of a sound hard money like Bitcoin.
And I think we need to explore Bitcoin probably in another show, but I think it's a really interesting subject to explore further. Can I ask you about interest and Riba; now we know that interest is Haram in Islam but we also know that there's not a single Islamic country that can escape the Riba trap. I mean let's consider Erdogan in Turkey for many years he was promising to lower interest rates I think interest rates I'm in a much higher than they were in the West you know 17 I think it was but anyway he lowered it down to something like 11 or 12 percent and the Turkish economy went South and he's had to uh return back to Orthodox policies and he's hired this chief you know the governor of his Central Bank who's now returned the economy back to the sort of Keynesian model of raising interest rates to deal with inflation. So, even someone like Erdogan who relatively speaking is the most inadverted commas, Islamic of the of the leaders or at least has some level of Islamic thinking about these sorts of matters has not been able to escape the Riba trap. Are we now doomed to just accept that Riba interest is so ubiquitous we have to accept this type of system henceforth.
It's quite possible that we will have it for all of human history going forward and at the same time I'm optimistic that we have it within us as a as the human race
to fix this problem I believe a solution already exists right um I think that Erdogan made the classic mistake of returning to the comfort blanket of Orthodoxy of economic Orthodoxy and you know that's a shame because he could have been persuaded otherwise I felt the same about Imran Khan when he was prime minister of Pakistan that he had an opportunity like someone was at its lowest State yeah in economic terms how many life loans have they now so I can't even count how many there are yeah and they always they're always in the situation where they are almost their arm has been twisted they've got a gun held to their head and you'll have to take this loan or else, I believe that the IMF is that's it's really the manifestation of evil in this world, it's… it leads to an allocation of a reallocation of resources from the global south to the global north that seemed to be its primary purpose the stated purpose is of course development and doing good stuff in the world yeah but the actual empirical evidence shows us that the global north ends up massively exploiting the global south and this will never end and if we want this to end we have to stop following the dogma of Orthodoxy economic Orthodoxy and economics is dogmatic there's no science in modern economics it's a belief I call them pre-speaking Latin because they obfuscate they create a layer between themselves and God so the lay people can't understand what God is saying this is talks about right, right yeah so why have we allowed economists to dictate how are our lives are determined frankly because Finance pervades every aspect of our lives these priests who speak Latin have used jargon and words that we don't understand, they've convinced us somehow that we need to take these loans and commit to a policy of austerity in order to pull ourselves out and by the way in the meantime can we have some of your minerals and can we have some of this and some of your cheap labor and you know manufacture these footballs for us in in Seattle court and whatever so this is a massively exploitative situation and the rest of the world is really not calling them out for this and we perpetuate this. We create alternative narratives a good alternative narrative is in Afghanistan in Afghanistan the narrative that you'll see on CNN on BBC is that women and girls can't be educated and of course that's a tragedy we must educate women goals I'm not saying otherwise but the other narrative that's been completely ignored in this process is that last winter the winter before last seven billion dollars of Afghani reserves were frozen in U.S banks by the U.S Fed and the Afghani people starved to death in a freezing winter they didn't have shelter, they didn't have food I have not seen a CNN or BBC report on the freezing of seven billion dollars of their own money by a foreign government who didn't like the new government now that's a manifestation of evil if you ask me. So, coming back to escaping Riba and the Erdogan issue, I think as I say Erdogan resorted to discomfort blanket yeah when instead he could have taken a radical step as I think Imran Khan could have done in Pakistan that radical step could have been and I'm sorry to keep coming back to this could have been something is fundamentally wrong, we have got nowhere else to go we've got nothing to lose so we may as well try a radical alternative and I think that the experiment that's taking place in El Salvador at the moment for example is a very exciting one and Salvador has decided to go full Bitcoin as legal tender in the country I think that's that is a choice that countries in the global South need to make they need to say no to the IMF, they need to say no to the freezing of their own money in a foreign country and have a decentralized currency that they alone have custody of.
Have you been following the BRICS developments, obviously as we're while we're speaking the BRICS countries have come together to host their annual conference in South Africa and there is a lot of discussion about de-dollarization as yet they haven't got to the point to create a BRICS currency but do you feel that's looming do you think that the global south are now coming together I mean today there's an announcement of the expansion of the brick Saudi Arabia, UAE have joined it. Do you think the tide is turning and the American hegemony and it's dollar ahead to many is now inevitably going to decline.
So, I think it's inevitable yes yeah but it's going to be bloody on the way right because the moment somebody says I don't want to sell you my oil in dollars I'll sell you in Rubles are one or some other cars or Bitcoin yeah is the moment you get invaded right and assassinated.
Saudi Arabia have been talking about doing this.
We've been talking about it yeah… Libya tried it and see what happened there so I think it is inevitable but as I say it will be problematic on the way. I think this is a healthy debate amongst the bricks I'm slightly concerned that they will end up concluding something that is a variant of Orthodoxy right so they may end up concluding let's have a sort of Eurozone equivalent yeah or a Euro and I think that would be a mistake because that's just that's just a repeat of fiat currency I would like them to be radical and say actually it is time that the world had a sound currency because if we look at empirical data, if we look at 5 000 years of human history not just the last 100 years of economic data much of which has been expunged from the record books otherwise wouldn't we wouldn't keep repeating you know Financial crises; if we looked at that 5000 years we'd say hang on something good happened whenever we had a global gold standard is there any way that we can repeat that what are the characteristics of money that require us that we're required to implement if we want to have a healthy vibrant economy and progress amongst humankind, so I hope that the debate amongst the bricks starts to transition in that direction but I don't know.
Harris Irfan JazzakAllah Khayr for your input today it's been really, really fascinating.
JazzakAllah khayr, and a pleasure to be here.
Thank you very much.
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