Investigation of relationship between commercial banks and capital markets within the interest-free banking system

Authors

1 Assistant professor of economics at Mofid University

2 Faculty member of economics department

3 M.A of economics at Mofid University

Abstract

Activities of money market and capital market and their effects on the economy are of high importance in the world todays and play a major role in controlling the economic enterprises and the flow of the economic cycle. This means that the development of financial markets has a decisive role in the process of economic growth and financial funding. No doubt that their proper functioning can effect on the investment required for the different economic sectors. Therefore, the role of financial markets in the supply of financial resources is a crucial issue that needs to be investigated.
The present article by using a descriptive–analytic method and library and internet resources was aimed to design a model for the relationship between the commercial banks and capital market within the interest-free banking system. It concluded that the banks in interest-free banking system can relate to capital market through using some tools such as underwriting, buying and selling Islamic Sukuk, securitization of assets, certificates of deposit, banks stocks, direct investments in the capital market, mutual funds, windows of capital markets services and assigning of funds to active companies in the capital market. Thus, while entering this market they can provide their required financial resources.

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