Anna hopes to be remembered by fellow club members as a welcoming, warm-hearted, and fun-loving individual
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Khaled Al Aboodi, CEO and general manager of Islamic Corporation for the Development of the Private Sector (ICD), was quoted as saying that since Shariah did not allow Islamic banks to invest in subprime product, they were safer from the toxic subprime assets when compared to conventional banks.
“Most conventional banks worldwide were in trouble because they don’t deal with Shariah products. Islamic banks are very strict in their policies which are monitored closely by Shariah boards at various stages,” Al Aboodi was quoted by a Saudi paper.
According to Qatar Islamic Bank (QIB), Islamic banking is set to become a $4 trillion global phenomenon over the next five years.
Quoting the international ratings agency Standard & Poor’s, QIB said its newsletter that sukuk, or Islamic bonds, was one of the fastest growing segments of Islamic banking along with mutual funds.
Islamic finance experts say global sukuk market stands at $82 billion. The International Monetary Fund (IMF) estimates the market to reach $150 billion over the next three years. The ever-increasing demand for financing infrastructure development and other mega projects in the private sector will continue to be major driver of demand for sukuk.
A recent report by Moody’s shows that Islamic banks have been fairly resilient.
No Islamic financial institution has acknowledged investing in Bernard Madoff’s $50 billion Ponzi scheme, and Saleh Al Tayar, Secretary General of the Franco-Arab Chamber of Commerce, said the $4.9 billion hit taken by Societe Generale SA from what it calls unauthorised trading by Jerome Kerviel couldn’t have happened in an Islamic institution.
“If global banking practices were based on Islamic practices then we wouldn’t be seeing the kind of crisis we are living through now,” he said.
Islamic financial institutions work on a philosophy of prohibiting transactions considered immoral and promoting greater social justice by sharing risk and reward.
Interest payments, short selling and contracts considered excessively risky are also prohibited. That rules out some of the products that got Western finance into so much trouble such as subprime mortgages, collateralised debt obligations or credit default swaps, experts explained.
“Islamic finance does demonstrate good banking behaviour that has been perhaps lost over the last 10 years or so,” said Neil Miller, head of Islamic finance at Norton Rose.
According to Aboodi, the mandate of ICD is to support economic development of its 48 member countries through provision of finance to projects promoting private sector as a vehicle for economic growth and prosperity.
The projects financed by ICD are selected on the basis of their contribution to economic development taking into account factors such as creation of employment opportunities and contribution to exports.
“The global financial crisis is creating some kind of uncertainty but we will try to meet demands from the private sector and we expect same growth next year,” he was quoted by the paper.
“So far none of ICD projects is affected by the global crisis,” Al Aboodi said after visiting various countries and taking the first hand information of the ongoing ICD projects. Al Aboodi recently visited
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