:London :Dubai :Kuala Lumpur :New York
  FOLLOW US  
Sign in   |   Register

Events

image Introduction to Risk Management in Islamic Banking – Basel II Compliance.
Event date: - 2012-12-07
   
image 12th Annual Islamic Finance Summit
Event date: - 2013-02-26
   
image The 3rd PPP MENA Conference
Event date: - 2013-03-17
   
image Islamic Finance Forum Europe
Event date: - 2013-05-28
   
  More Events    Add Event

Search

Enter your keyword  

Follow Us






News by Topics

It has been reported that undoubtedly traditional banking and finance have had a difficult time through the global financial crisis, at least where the escalation of indebtedness of both households and government drove spending excesses of such a scale as to create systemic and even sovereign credit risk.

By comparison, the progression of Islamic finance is perceived as a contrasting force to conventional banking practice, one whose precepts might be protective against that kind of deeply destructive episode.

The ideals of risk-sharing, a dedicated linkage to real assets, and ethically-responsible investment, wealth creation and distribution are intended to offer a safer and equitable approach compared to what transpired in the US and Europe.

As Faisal Aqil, Deputy CEO, Consumer Wealth Management, Emirates Islamic Bank and Dubai Bank puts it, "fundamental values such as accountability, transparency, cooperation and solidarity [are] crucial, designed to procure stability and security for all those involved".

So what of the past five years? How has Islamic finance been affected, given its prominence particularly among regions in financial surplus and intermediate economic development?

Aqil is clear about that. Partnerships between banks and their customers that include the essential concept of profit/loss sharing have been "one of the main factors that helped Islamic banks withstand the widespread effects" of the crisis, he says, so that Islamic finance is perceived increasingly as a "credible substitute" for conventional banking business.

Dr Massoud Janekeh, Head of Islamic Capital Markets at Bank of London and the Middle East, and a regular participant in industry gatherings, gave me a further account this week.

The crisis brought a spotlight onto Islamic Finance (IF), and showed how it works as an alternative, he told me. "When conventional finance shot itself in the foot, it put sharia into sharp relief."

It also accelerated its development - especially in countries like Malaysia and Turkey, where there was already a strong platform - although the coincidence of higher oil prices created liquidity to fuel this process, notably in the Gulf, which was putting the relevant infrastructure in place such as at DIFC, with capital market laws serving to benefit.

As to how IF banks have fared overall, perhaps it's better not wholly to generalise. Janekeh notes that they "are not a homogeneous group", and those in Europe are different to those in the Middle East, for instance.

In the Gulf, while the tenets of Islamic finance helped spare its institutions from certain exposures, they were still, like others, especially vulnerable to real estate.

When many conventional banks stopped lending, Islamic banks stepped in. That was a failure of risk management, Janekeh concurs, and there is "something in the idea" that they suffered for being restricted to asset-backed business and so became unduly concentrated.

There are both cyclical and structural distinctions, he suggests. Many Islamic banks were set up in the past decade, and were victims of timing. Yet, holding greater cash reserves is prudent and will bode well, and the potential for liability gathering in terms of deposits is another clear advantage.

On the capital markets side, borrowers had turned to IF in 2007/08 as conventional financing deals expired and that market dried up. Those had typically been on 'five-year tickets' to 2012-14, and Janekeh referred to a certain nervousness about repayment in the subsequent conditions, with the events of the Arab Spring and evidence of capital flight.

Share |

 

starting your own business with B&F Switching to B and f services

News

image How credit risk is associated with key macroeconom ...
2013-11-11
Recently published article by Hamid A.H. Al-Wesabi & Nor Hayati Ahmad from University Utara Malaysia is answering the qu ...
image London can lead world as an Islamic Finance hub ...
2013-10-29
Financial Time published the following article from George Osborne (UK chancellor of the exchequer) regarding this week ...
image The world bank will open its first centre on Islam ...
2013-10-28
The world bank will open its first centre on Islamic Finance at Borsa Istanbul premises, the exchange market said Monda ...
image Busy November for Islamic Finance ...
2013-10-25
Islamic Finance Calendar for November 2013: 1. The 9th World Islamic Economic Forum held in:London Date: MONDAY, NOV 4 ...
image Family Farming: The Key to Alleviating Hunger and ...
2013-08-09
After decades of failed attempts to eradicate hunger, development agencies, internation ...

Share |

Company Recomendation of the week
Hyde Park Executive Meetings   
Hyde Park Executive is situated in the West End of London, the area is home to major corporate headquarters, real estate businesses, hedge funds, wealth managers and embassy offices in the neighbourhood of Mayfair, Oxford Street, Park Lane, and Knightsbridge. Our meeting rooms are based on 12th floor and all benefit from having natural daylight – after all nobody wants to be stuck in a windowless box all day.Our service is all about flexibility and this extends to our booking options. It could be a one-hour catch-up in a meeting zone, half-day, 24-hours or an entirely bespoke package. For an informal meeting, you’re welcome to catch-up with a coffee in reception or over lunch in our stunning Dubai room. www.hydeparkexecutive.com


Current issue

''The principle of Islamic Finance is about transparency, ethics and fairness, as well as promotin ...
Read More ..
main cover islamic

Subscribe

Subscribe Digital

  Current Issue     Trial Version     Digital     Archive  







Click to launch the full edition in a new window
Online Publishing from YUDU

Latest Books

image Islamic Branding and Marketing: Creating a Global Islamic Business
Author/Publisher: - Dr. Paul Temporal
   
image Understanding Islamic Banking: The Value Proposition That Transcends Cultures
Author/Publisher: - Joseph A. DiVanna
   
image Critical Issues on Islamic Banking and Financial Markets: Islamic Economics, Banking and Finance, Investments, Takaful and Financial Planning
Author/Publisher: - Saiful Azhar Rosly
   
image Product Development in Islamic Banks (Edinburgh Guides to Islamic Finance)
Author/Publisher: - Habib Ahmed
   
image Frequently Asked Questions in Islamic Finance (The Wiley Finance Series)
Author/Publisher: - Brian Kettell
   
  Buy Now      More Books  

QUOTE of the week

 Islamic finance is becoming an integral part of the global finance industry and has taken its roots in almost all of the Muslim countries but has also been under discussion and penetration in selective Western and Far Eastern jurisdictions

Moinuddin Malim, CEO, Mashreq Al Islami


GCB    Business Media Group - the Publisher    B&F Services Ltd.