Global role seen for Islamic banking

A leading British economist sees a vital role for Islamic banking in international finance.

    The conference on Islamic banking hosted Bahraini capital Manama

    Sir Howard Davies, director of the London School of Economics and Political Science (LSE), said in Bahrain on Sunday that Islamic Banks should be integrated into the international banking system.

     

    "Islamic banking should be mainstreamed into the international

    system. What needs to happen is to encompass both systems ..

    . Having

    two sets of rules, one for conventional banking and another for

    Islamic banking, will not do it," Davies told reporters on the

    sidelines of the 10th World Banking Islamic Conference taking place on

    Sunday and Monday in the Gulf island state. 

     

    Davies said he believed the problem was that the international

    standard setters pay little attention to Islamic banking.

     

    "Up to now the international environment, the framework of rules

    within which each country must try to situate itself, has largely

    been developed without reference to the needs of Islamic banking."

     

    The LSE director said he believed that "miscommunication is

    largely due to the fact that the Islamic banking community is not

    represented in the Basel Committee, the global organization based in

    Switzerland, which sets banking standards."

     

    Davies called for a "dialogue" between the international

    standards setters and the leaders of the Islamic banking community,

    saying that the time the Basel Committee has spent on Islamic

    financial issues is "short".

     

    "The committee is of a rather curious composition, it is not

    representative of the global financial system and it is time it is

    changed because it is too heavily European dominated," he said. 

     

    "If Islamic organizations keep talking among themselves, they

    will not be successful."

     

    According to Fouad Shaker, secretary general of the Union of

    Arab Banks, there are over 265 Islamic financial institutions in the

    world with capitaliztion in excess of $13 billion and assets

    of over $262 billion.

     

    Their financial investments exceed $400 billion and deposits are in excess of $202 billion.

    SOURCE: AFP


    YOU MIGHT ALSO LIKE

    'We were forced out by the government soldiers'

    'We were forced out by the government soldiers'

    We dialled more than 35,000 random phone numbers to paint an accurate picture of displacement across South Sudan.

    Interactive: Plundering Cambodia's forests

    Interactive: Plundering Cambodia's forests

    Meet the man on a mission to take down Cambodia's timber tycoons and expose a rampant illegal cross-border trade.

    Pakistan's tribal areas: 'Neither faith nor union found'

    Pakistan's tribal areas: 'Neither faith nor union found'

    Residents of long-neglected northwestern tribal belt say incorporation into Pakistan has left them in a vacuum.