The Vatican offered Islamic finance principles to Western banks as a solution for worldwide economic crisis.

Daily Vatican newspaper, ‘L’Osservatore Romano, reported that Islamic banking system
may help to overcome global crisis, Turkish media reported.

The Vatican
said banks should look at the ethical rules of Islamic finance to restore
confidence amongst their clients at a time of global economic crisis.

“The ethical principles on which Islamic finance is based may bring banks
closer to their clients and to the true spirit which should mark every
financial service,” the Vatican ‘s
official newspaper Osservatore Romano said in an
article in its latest issue late yesterday.

Author Loretta Napoleoni and Abaxbank
Spa fixed income strategist, Claudia Segre, say in the
article that “Western banks could use tools such as the Islamic bonds,
known as sukuk, as collateral”. Sukuk may be used to fund the “‘car industry or the
next Olympic Games in London ,”
they said.

They also said that profit share, gained from sukuk,
may be an alternative to the interest. They underlined that sukuk
system could help automotive sector and support investments in infrastructure

Islamic sukuk system is similar to bonos of capitalist system. But in sukuk,
money is invested concrete projects and profit share is distributed to clients
instead of interest earned.

Pope Benedict XVI in an Oct. 7 speech reflected on crashing financial markets
saying that “money vanishes, it is nothing” and concluded that
“the only solid reality is the word of God.” The
has been paying attention to the global financial meltdown and ran articles in
its official newspaper that criticize the free-market model for having
“grown too much and badly in the past two decades.”

The Osservatore’ s editor, Giovanni Maria Vian, said that “the great religions have always had a
common attention to the human dimension of the economy,” Corriere della Sera reported