Savings+and+souls

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« Back to Document View Databases selected: ABI/INFORM Dateline, ABI/INFORM Global, ABI/INFORM Trade & Industry Savings and souls; Islamic finance Anonymous . The Economist . London: Sep 6, 2008. Vol. 388, Iss. 8596 Abstract (Summary) Islamic banks are opening their doors across the Gulf and a new platform for sharia-compliant hedge funds has attracted names such as BlackRock. Western law firms and banks, always quick to sniff out new business, are beefing up their Islamic-finance teams. Governments are taking notice too. In July Indonesia, the most populous Muslim country, said it would issue the nation's first sukuk. The British government, which covets a position as the West's leading centre for Islamic finance, is also edging towards issuing a short-term sovereign sukuk. France has begun its own charm offensive aimed at Islamic investors. A combination of ingenuity and persistence has enabled Islamic finance to conquer some of the main obstacles. Although Islamic finance has done well to reduce its costs and broaden its product range, it has yet to clear plenty of other hurdles. Scholars are the industry's central figures, but recognised ones are in short supply. Balancing these imperatives will become even harder as competition grows fiercer. Full Text (2218 words) (Copyright 2008 The Economist Newspaper Ltd. All rights reserved.) Muslims have a lot of money to invest. But it is a constant struggle to reconcile faith and finance TO SEE Islamic finance in action, visit the mutating coastline of the Gulf. Diggers claw sand out of the sea off Manama, Bahrain's capital, for a series of waterfront developments that are part-funded by Islamic instruments. To the east, Nakheel, a developer that issued the world's largest Islamic bond (or sukuk) in 2006, is using the money to reorganise the shoreline of Dubai into a mosaic of man-made islands. Finance is undertaking some Islamic construction of its own. Islamic banks are opening their doors across the Gulf and a new platform for sharia-compliant hedge funds has attracted names such as BlackRock. Western law firms and banks, always quick to sniff out new business, are beefing up their Islamic-finance teams. Governments are taking notice too. In July Indonesia, the most populous Muslim country, said it would issue the nation's first sukuk. The British government, which covets a position as the West's leading centre for Islamic finance, is also edging towards issuing a short-term sovereign sukuk. France has begun its own charm offensive aimed at Islamic investors. Set against ailing Western markets such vigour looks impressive. The oil-fuelled liquidity that has pumped up Middle Eastern sovereign-wealth funds is also buoying demand for Islamic finance. Compared with the ethics of some American subprime lending, Islamic finance seems virtuous as well as vigorous. It frowns on
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speculation and applauds risk-sharing, even if some wonder whether the industry is really doing anything more than mimicking conventional finance and, more profoundly, if it is strictly necessary under Islam (see
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