Article

2008-11-29 Europe

Islamic banks in France from 2009

PARIS, NOVEMBER 27 - From next year Islamic banks conforming to sharia law, could be part of the panorama of the French banking system. Economy Minister Christine Lagarde said at the opening of the second French forum of Islamic finance that she had decided to "make a great welcome in Paris to this finance". Le Parisien reports that there are at least three banks requesting accreditation: the Qatar Islamic Bank which already has offices in London, the Kuwait Finance House, and the Al Baraka Islamic Bank, from Bahrain. Their target is the more than five million muslims resident in France, an attractive market: according to a survey last year by IFOP at least half a million muslims would be interested in loans which respect Sharia law (which forbids loans with interest). From this point of view, said President of the French-Arabic Chamber of Commerce Hervé de Charette, "the arrival of Islamic finance in France would be an integrating factor".

According to Elyes Jouini, a professor of economics at Paris-Dauphine, it is still a frightening prospect because it is against religious integralism and aimed at financing terrorism.

The global economic crisis is revolutionising the market though ad from New York to Hong Kong there is a rush for the billions of dollars of the rich oil producing countries of the Gulg. (ANSAmed).

Posted by classer 2008-11-29 00:00|| || Front Page|| [7 views ] Top

#1 I realize this is not a fashionable opinion around here, but in light of the current housing finance crisis Islamic banking may well provide a better model.

Essentially the bank buys the house on your behalf and you have a long term contract with the bank to lease the house until at the end of the lease you own the house.

The advantage is that the bank has the house on its books and pays much more attention to its real value, unlike the the conventional banking model which focuses on your capacity to repay the debt irrespective of the value of the house.

Posted by phil_b 2008-11-29 04:06|| 2008-11-29 04:06|| Front Page Top

#2 Sharia Compliant Finance is part and parcel of the global Islamist movement. Advocates of Islamism define Islam as a complete sociopolitical system that should govern ones personal and private life. This is a 20th-century phenomenon fueled internationally by oil profit in the Middle East. This totalitarian ideology has evolved into the separatist Salafi movement, which encourages segregating Muslims from non-Muslims through violent jihad and non-violent means.

Posted by classer 2008-11-29 07:23|| 2008-11-29 07:23|| Front Page Top

#3 Reminds me of the Rule of 78s. Run as fast as you can from both.

Posted by ed 2008-11-29 08:52|| 2008-11-29 08:52|| Front Page Top

#4 phil_b - wouldn't work. With 'mark to market' accounting rules the bank would still have to drastically write-down it's loan portfolio throwing it's financial ratios out of whack.

Posted by DMFD 2008-11-29 09:42|| 2008-11-29 09:42|| Front Page Top

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