from Presidency of the Republic of Turkey Finance Office
Systemic risks and the devastating effects of the current global debt based financial system have become apparent as a result of the global financial crisis in 2008. For this reason, in the post-crisis period, searches for alternative to the existing financial system started to be discussed both in the academic community and among policy makers. Criticism of the current global financial system focuses on the facts that this system is based on debt and interest, the financial leverage causes systemic risks, excessive financialization, the disconnection between the financial sector and the real sector, and lack of ethical and moral values. Within the framework of new searches, more human-oriented alternative finance models such as socially responsible finance, green finance, and participation finance have come to the fore.
Among these finance models, participation finance is one of the most important and comprehensive alternatives offered to the existing financial structure with its nature and basic principles. In this regard, participation finance presents a very important alternative in terms of reducing systemic risks and establishing a close link between the real sector and the financial sector, as it prioritizes moral values, is based on assets and is based on risk sharing...
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