Banking

First of all, there are too many qualitative differences between conventional and Islamic mode of finance to conclude that they share the risks. Conventional finance seeks to eliminate risks, one of the reasons the crisis struck.Let me explain. Banks essentially transferred their credit risks to insurers and pension funds by securitizations. That is unwise from ecoonmic welfare viewpoint because can best afford to bear credit risks because they originate the credit. Insurers and Pension funds can best afford the liquidity risks since they have long term sources of finance. Hence banks can ill afford to transfer credit risks. On the other hand, the Islamic model does exactly that.The model is dependent on bearing of risks. The essential idea is to consider the purpose of funds and not the credit wothiness of borrowers in the market. Dubai model essnetially collated the two modes of financing .There are loopholes, as the example of refrigerators conveys. However that is more due to the lack of single advisory body. Different banks have different Sharia advisory boards. Moreover they share the scholars due to dearth of these scholars.There needs to more research into it than dubbing it as just another mode.