Establishment of interest-free capital markets in Turkey and interest-free capital market instruments

Indebtness and usury (interest) have a central place in the conventional financial structure, which has taken its shape of today over a period of 300 years of development. Throughouth history, both monotheistic religions as well as ancient philosophic doctrines had realized the destabilizing effect of usury on the society and have proposed alternatives for the economic and financial system relied on indebtness and usury. Islam has also established rules and institutions in order to organize the economic and financial life as well as the all aspects of life of the society and the mankind. While organizing the life of society, Islam has aimed to set up a balance between the society and the mankind, in order to protect one from each other. Hence, Islam has excluded usury from the central point of economic and financial system, and instead, attached a crucial importance to partnership institution which is relied on sharing of risks between all included parties. In this context, it has been argued and advocated in the thesis that the current conventional financial system should be replaced by a financial system relied on partnership and the best way to establish a partnership-based financial system is the interest-free capital market where financial instruments bearing interest excluded from and partnership-based financial instruments included in and it has been also investigated in the thesis what could be done in Turkey in order to establish an interest-free capital market and which financial intruments in accordance with economic principles of Islam could be included in such a market. Keywords: Interest-free (Islamic) capital markets, interest-free (Islamic)