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C. Public sectorSince commercial banks are the only financial intermediaries in the economy, investment deposits in the banking system represent the financial wealth of the public. Total wealth of the public is, thus, equal to financial wealth and its stock of capital (K) (27). The public has basically two sources of funds: first, Mudarabah financing obtained from banks (FP), and second, its own savings (S). In the absence of a debt market, any desired increase in assets (financial or total) has to be accommodated through one of these sources.The basic structure of the model that we have described above can be conveniently summarized in the following flow of funds accounts:Table 1. Flow of Funds Accounts of the Islamic Financial System.
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