Again, I have not been able to blog recently due to preparing for traveling to New York for the "Islamic Finance in North America" conference. There's a couple little news items below. The conference has provided a very good opportunity to meet new people working in Islamic finance (or interested in getting involved) and seeing others whom I have met at previous conferences. The focus of the conference is Islamic banking and it has been very valuable. Retail banking is one of the most underdeveloped in North America, partly due to regulations. There are a few regulations like "truth in savings" (Federal Reserve Regulation DD), "truth in lending"(Federal Reserve Regulation Z) which require interest rate and annual percentage yield disclosures in advance, which adds difficulties to Islamic banking.
The Financial Times Alphaville blog takes a fairly simplistic approach to Islamic hedge funds (and Islamic finance in general) reflecting the need for the Institute of Halal Investing (my self-plug for the week). There are issues with how Islamic finance works in its current form, but making comments without a recognition that the industry is only about 30 years ago (the first Islamic bank in Malaysia opened in 1983) is generally unhelpful. To quote the Second Minister of Finance of Malaysia Nor Mohamed Yakcop, speaking today at the conference, the challenge is for "the perfect to be the enemy of the good".
I will not give a link to this article, but it is good to occasionally recognize the other (non-regulatory) oppositions to Islamic finance in the U.S. from its ignorant opponents. Consider the quote from a group which frequently spreads hateful misinformation about Islamic finance: "Islamic finance has very little to do with finance and everything to do with Islam. And not just any kind of Islam, but the most radical, fascist-like interpretation of the Islamic religion that has increasingly become the dominant idiom in the Muslim world." Regulations Z and DD are not the only challenges Islamic finance faces in the United States, unfortunately.
The Investment Dar, the large Kuwaiti firm which recently purchased Aston Martin in a Shari'ah-compliant leveraged buyout, has plans to open an Islamic equity market with a particular emphasis on increased transparency.
Malaysia will issue additional licenses to foreign firms looking to set up stand-alone Islamic units in the country.
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