Saturday, March 28, 2009

Rebooting Islamic Finance: It's Time

I have been very critical of Islamic finance as it has evolved since the 1970s: an inefficient part of the international financial system that served no purpose except line the pockets of lawyers and experts. Now that the tools of structured finance have been proven to be as much a disaster as others and I had warned, perhaps participants in this industry - many of whom are sincere, I am sure - will hopefully abandon their response to my critiques: "what is wrong with SPVs, that is how all finance is done with success." 

Perhaps now is the time to switch from negative criticism to positive suggestions of how to do things differently.

This is not an area where I believe in keeping ideas to oneself until one publishes them or makes some money in consulting fees for proprietary structures. Also, it is an area where open discourse may help to improve upon proposals...

So, here we go, starting with possible innovations in microfinance structures that I hope to start investigating experimentally this summer: و على الله قصد السبيل


Blogger Unknown said...

It is not only time, it is way overdue. The honeymoon for some of these big Islamic banks is over.

7:55 AM  

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