Islamic Banking and Finance - Insight on Possibilities for Europe

Islamic Banking and Finance - Insight on Possibilities for Europe
WSBI, ESBG
October 2009

"The growing Muslim population in Europe – estimated today at over 14 million – means that there may be a significant portion of the population for whom their religious beliefs make traditional European financial practices inaccessible. In order to serve this portion of the population, Islamic finance may be an important new avenue for delivering financial services and addressing a market vacuum."

Islamic Banking and Finance - Insight on Possibilities for Europe

Islamic Capital Markets and Investment Banking: The Definitive Guide

Islamic Capital Markets and Investment Banking: The Definitive Guide

With the financial crisis, global finance decision makers are increasingly eyeing the unscathed Islamic capital markets for the next big investment opportunity. Find out what these opportunities are in the latest report, Islamic Capital Markets and Investment Banking: The Definitive Guide. The report provides an objective and actionable quantitative analysis of the global Islamic capital markets from authoritative and independent sources.

Included are sector-by-sector analysis of Islamic capital markets core areas including:

- Sharia-compliant derivatives

- Asset management

- Debt capital markets

- Treasury and interbank markets

- Private equity plus

- Comprehensive data on 150 banks and financial institutions

View sample pages of the report here. Highlighting this report (even though it is not freely available) as we contributed to certain portions of it.

Islamic Capital Markets and Investment Banking: The Definitive Guide

IFN Roadshow - 2010 Schedule

The Islamic Finance News Roadshow is a practical way to meet industry practitioners and learn about the current issues facing Islamic finance.  A far cry from the many expensive conferences out there, and it must be said they work hard to minimize advertorial-intensive presentations/speakers.  These free events have just entered their third year and have recently added nine developing Islamic financial markets to their list of cities being visited - check the roadshow venues and dates here.

IFN Roadshow - 2010 Schedule

Markets and the role of government in an economy from Islamic perspective

Markets and the role of government in an economy from Islamic perspective
Hasan, Zubair (2008)
INCEIF

Abstract: "This paper explains the notion of market in historical perspective and the role markets play in free enterprise economies. It lists the major market failures and the role governments are expected to play in regulating and supplementing markets including the promotion of CSR from Islamic perspective. The discussion is limited to product and factor markets."

Markets and the role of government in an economy from Islamic perspective

GFH Chart

The Rise and Fall of Gulf Finance House
By Mohammed Khnifer, Aatef Baig, and Frank Winkler
Reading University, May 2010

GFH Chart

UNEPFI & Islamic Finance

Over the recent past many parallels have been drawn between Islamic finance and sustainability, with further suggestions of convergence towards its CSR and SRI cousins (for instance refer to these various articles on Islamic finance and ethics).

Recently Michael Gassner (islamicfinance.de) has highlighted how Islamic finance institutions could (and should) support the United Nations Environment Program Finance Initiative (UNEP FI) which aims to forge a stronger link between sustainability and financial institutions around the globe.

There are currently two signatories (out of 200) that are loosely related to Islamic finance (namely NBK and Bank Muscat) and hopefully many more will follow - membership information of UNEP FI is available here.

There is further scope if one considers the United Nations Principles for Responsible Investing (UN PRI), so clearly much to look forward to if Islamic finance institutions truly recognize the reason for their existence. It is a difficult road ahead but something that deserves support and encouragement from all of us.

UNEPFI & Islamic Finance

Case Study: MIGA and Islamic Finance

Doraleh Container Terminal Case Study
World Bank Group

Multilateral Investment Guarantee Agency

Djibouti, April 2008

Abstract: "Increased liquidity in Islamic financial markets, spurred by oil revenues in the Gulf region, is creating a growing demand for deals structured using Islamic finance. In order to satisfy this demand, traditional business tools need to be adapted to meet the relatively unique and complex needs of Islamic finance. In 2007, Multilateral Investment Guarantee Agency (MIGA) was tapped to provide political risk insurance for a critical project in Djibouti that was being funded through an Islamic financing structure. The main challenge faced by the agency was that the project's Islamic financing structure had payment obligations spread out across numerous agreements, while MIGA's guarantee coverage for third party lenders normally considers such obligations under a single loan agreement. MIGA structured its guarantee in a way that addressed the key risks that concerned the project financiers, while meeting the strict requirements governing the Islamic structure. This resulted in the agency's first-ever guarantee coverage of an investment supported by an Islamic financing structure. The Doraleh Container Terminal project involves the development, design, construction, management, operation, and maintenance of a new container port terminal in the city of Doraleh, Republic of Djibouti."

Case Study: MIGA and Islamic Finance

Finance and Growth: The Role of Islamic Contracts

Finance and Growth: The Role of Islamic Contracts
Ismail, Abdul Ghafar and Tohirin, Achmad (2009)
Centre for Research in Islamic Economics and Finance
School of Economics, Universiti Kebangsaan Malaysia,
Centre for Islamic Economics Development and Studies
(P3EI) Faculty of Economics, Islamic University of Indonesia

Abstract: "Although, Islamic law has been in existence for more than fourteen hundred years, but its implementation have been subjected to the willingness of the rulers in the passage of history and civilization. Although, the study on financial contracts has been extensively reviewed, the role of Islamic contracts is not highlighted, except those in the historical institutional and contract theory literatures. The study that link finance and growth takes many dimensions. One of the dimensions is law and finance view. In the beginning, the studies that link the former only look at the finance variables and economic variables. Further development analyses the relationship at the system level, i.e. discussion whether bank-based vs. market-based matters on growth. Islamic finance comes up with its distinctive contracts and products of profit-loss sharing. It may give different character and notion in the financial system in particular and in the economic system in general. This paper is aimed at discussing Islamic laws which are relevant to finance. Most importantly the aspect of contracts as foundation for the distinctive Islamic financial products, i.e. the one resembling profit-loss sharing nature containing cooperative spirit, will be analysed to establish a strong connection with financial stability as pre-requisite to achieve the economic growth."

Finance and Growth: The Role of Islamic Contracts

Islamic Financial Services Industry Development : Ten-Year Framework and Strategies

Islamic Financial Services Industry Development : Ten-Year Framework and Strategies

IRTI, IFSB

2007

Abstract: "This document presents an overview of the past, present and expected future of the Islamic Financial Services Industry (IFSI). It addresses the challenges and opportunities of the various segments of IFSI. The strategic objectives and proposed initiatives are also outlined. Finally, the document states the recommendations covering the broad strategies and initiatives to be undertaken for developing the various components of IFSI. "

Islamic Financial Services Industry Development : Ten-Year Framework and Strategies

Insurance in Emerging Markets: Overview and Prospects for Islamic Insurance

This is a useful analysis of the Takaful industry as seen from a macro perspective, providing a fairly comprehensive review of industry with an emphasis on quantification of the market size and prospective growth.

Insurance in Emerging Markets: Overview and Prospects for Islamic Insurance
Swiss Re
2008

Insurance in Emerging Markets: Overview and Prospects for Islamic Insurance

World Business: Islamic Recovery

Some of the industry voices sharing their thoughts on the role of Islamic finance in the aftermath of the financial crisis. Over the past few months we have heard from many promoters as well as detractors, nevertheless it seems that balanced and objective views are increasingly harder to find.

Source: World Business

World Business: Islamic Recovery

Reshaping the Islamic Finance Industry Applying the Lessons Learnt from the Global Financial Crisis

Reshaping the Islamic Finance Industry Applying the Lessons Learnt from the Global Financial Crisis
Rafe Haneef, Research Fellow, ISRA & Edib Smolo, Researcher, ISRA
ISRA Research Paper (No. 11/2010)

"In the last 27 years, the world has witnessed more than 124 distinct financial crises. The financial meltdown caused by the current global financial crisis brought the financial world to its knees. This paper aims to discuss how the Islamic finance industry can reshape itself by learning lessons from the global financial crisis. To achieve this aim, the paper first identifies the lessons that can be learnt from the crisis including risk transfer & imprudent credit growth, failure of risk management, liquidity and leverage, lax regulation and opaque disclosure. The paper then suggests how the economic agents’ behavior and responsibilities could be reshaped by highlighting the sellers’ standard of care and regulatory responsibility. The paper concludes that the global financial crisis revealed the weaknesses of the global financial architecture on one side and provided an opportunity for Islamic finance to show its inherent strengths and qualities on the other. To facilitate this, the paper offers some possible Shari‘ah-based solutions that can help the financial world avoid similar crises in the future."

Reshaping the Islamic Finance Industry Applying the Lessons Learnt from the Global Financial Crisis