ABSTRACT
The roots of the 2008 global financial crisis that originated in the United States subprime mortgage market are firstly traced to the demand side of financing. Borrower preferences are based on excess ownership and spending. Such consumer preferences were matched by the suppliers’ decisions to allow easy lending and the accumulation of multiple loans. The cost of such financial excess is shown to be the rate of interest. The relevance of interest rates in efficient financing and economic resource mobilization is here questioned from a theoretical point of view. Its rejection and replacement by participatory financing instruments in the good things of life is formalized. A new financial architectural is thus laid out in terms of the central issue of money, finance and real economy complementary relationships. These can be simulated by circular causation equations. The foundational conceptual premise is governed by the episteme of unity of knowledge. Thus, the Islamic worldview of unity of knowledge is invoked to address the theme of 100% Reserve Requirement Monetary System (100% RRMS). Its social and economic implications are discussed.
