Solutions to Prevent Financial Crisis in Islamic Economic Perspective: ANP Approach

In the past two centuries financial crises have occurred one after another repeatedly since the first financial crisis in England 1825 until current ongoing global financial crisis triggered by the US subprime mortgage crisis in August 2007. These repeated man-made financial crises happened due to the transgressions of Allah's laws in financial dealings, especially in the abandonment of main pillars of Islamic financial system, namely prohibition of rib (usury or interest), prohibition of maysir (game of chance or speculation) and prohibition of gharar (excessive uncertainty), in their many forms, as well as due to misbehaviors of economic actors, poor governance and unsustainable fiscal system. The solutions taken have never touched their real root causes, so that financial crises have never subsided and have repeated with greater frequency and intensity affecting wider region. This study will apply soft system method Analytic Network Process (ANP) to provide Islamic solutions to prevent financial crisis which will be grouped into five clusters, namely: Behavior Control, External Control, Good Governance, Stable Monetary System and Sustainable Fiscal System. Each cluster will have six relevant elements obtained from literatures and in-depth interviews with several experts.