Umer Chapra, an Islamic economist, recently discussed the reasons he saw for the credit crisis and the reasons that Islamic banks would not create a similar crisis. While I agree that the Shari'ah restrictions on Islamic banks would limit the scope for excessive bad lending, I don't think that on its own Shari'ah-compliant banks would be completely immune from a similar crises caused by the growth of a bubble in real estate (or any other Shari'ah-compliant asset). The additional scrutiny that Shari'ah-compliant financial products face in the Shari'ah review process can potentially reign in excessive speculation and prevent some of the worst excesses that characterized the recent crisis in conventional finance. A lecturer at Al Azhar University, Shiob-bin-Mukhtar, goes further saying that there would be no financial crises if Islamic finance was exclusively used. The head of Global Council of Islamic Banks, Saleh Kamel, announces the failure of capitalism and suggests an Islamic financial system as a replacement.
An article discusses the possible regulatory and market changes in the GCC which are likely following the credit crisis.
An investment company in the UK, cru Investment Management, is creating an asset-backed investment fund that will invest in commercial agriculture in Africa. The investment is seen as good from both an investment perspective (the fund management expect a return of between 15-20 percent) and an ethical perspective: one of the stated goals of the investment fund is to "help to create jobs and give rural Africans the chance to help themselves out of poverty".
Islamic finance in Europe is set to grow, according to speakers at a conference in Paris. It is also starting to emerge and grow in Australia.
No comments:
Post a Comment