Global Banks Move Toward Islamic Financing Options

June 9, 2006

Source: BBC News

On June 9, 2006 BBC News reported, "The dramatic growth of Islamic banking and finance appeared to have been confirmed during the recent World Economic Forum in Sharm al-Sheikh in Egypt. One of Germany's biggest banks, Deutsche Bank, announced a joint venture with Ithmaar Bank of Bahrain and Abraaj Capital of Dubai to launch a $2bn (£1bn) Sharia-compliant financial fund. The banks say the fund is designed to boost education initiatives and investment in media and energy companies, and infrastructure in the Middle East. More and more conventional international banks, such as Citibank, HSBC and UBS, are converting some of their services to interest-free Islamic finance models. Estimates of the value of Islamic banking internationally range from $200bn to $500bn. Some financial analysts are concerned that the increase in Islamic banking opens Western financial institutions to influence informed by a conservative Islamic agenda. But many bankers at the World Economic Forum were upbeat about a growing success story of banking services which they argue are a fairer and more ethical way to handle financial affairs."