The Securities Commission in Malaysia is also deciding whether to allow Islamic financial institutions to short a limited number of stocks in order to "boost market liquidity" and that this has been approved by the SC's Shari'ah board.
The Malaysian central bank, Bank Negara, plans to issue guidelines for Islamic financial institutions to create greater standardization and establish a international Shari'ah research academy, a helpful development at odds with sentiments of members of the AAOIFI Shari'ah board.
The International Swaps and Derivatives Association (ISDA) and the International Islamic Finance Market (IIFM) are working on a standardized master agreement for Shari'ah-compliant derivatives for hedging (Ta'Hawwut).
The governor of the Central Bank of Bahrain, Rasheed Al Maraj, says that the credit crisis has been little impact on the Islamic financial institutions so far but, "The effects of the global financial crisis on the real economy have the potential to transmit shocks to Sharia-compliant institutions as well. This means that there must be a very high priority placed on sound management and risk management practices at Islamic financial institutions".
Fox News, a conservative news organization jumps on the anti-Islamic finance bandwagon in a story full of hyperbole, misinformation and fear-mongering with Frank Gaffney even saying that Islamic finance is a "seditious system that supports jihad". I typically don't like to even give space on my blog to criticisms that have so little basis in fact, but when they emerge from the fringe network of think tanks that create their own little echo chamber into a news organization that has mass appeal (in the U.S. at least), it should be mentioned for what it is.
One positive point in the article was a few quotes from Islamic finance practitioners who were quoted refuting the specious allegations thrown around:
"Nicholas Kaiser, fund manager at Amana Mutual Funds Trust in Bellingham, Wash., said that his company's Shariah-compliant mutual fund products are no different from any other religious funds and that the company carefully screens its investors. 'Our shareholders are American. We don't take money from non-Americans because of money-laundering laws. We have to know our shareholders and be sure they aren't engaged in nefarious activities. We screen and check and verify every shareholder,' Kaiser said. 'We simply take people's money, invest it and give it back to them when they want it. We don't try and convert the country. We don't have any religious position. We aren't evangelical. We aren't zealots. We're money managers,' Kaiser said. 'I happen to be Episcopalian.'"
Ibrahim Warde, a professor at Tufts University, is quoted explaining the motivations of the extreme critics of Islamic finance: ""People who don't like Islam and who are afraid of Islam would obviously not like the notion of Islamic finance. I'm not sure that those who hold this view necessarily know much about it, but it's some kind of visceral view that some people hold"