Snapshots of Islamic Banking: Islamic banking is apparently being rebranded with a new name, participation banking, at leat according to the World Islamic Banking Competitiveness Report 2014–15: Participation Banking 2.0, which is published by the firm that used to be called Ernst & Young, before it was rebranded to EY in 2013. The idea of Islamic banking has been around for awhile now: for example, the Journal of Economic Perspectives (where Ive worked since 1987 as managing editor) ran an article touching on the subject back in the Fall 1995 issue Islamic Economics and the Islamic Subeconomy (9:4, 155-173). Then as now, there is some contoversy over the extent to which Islamic banking involves changing the labels on financial contracts without (much) altering the financial flows, or whether it represents a fundamentally different kind of banking arrangement. I remember talking to a friend at a U.S. mortgage financing firm who told me that if someone walks in the door and wants to apply for a mortgage, he would reach into a file in his desk and pull out the paperwork. If they said they wanted an Islamic mortgage, he would reach into a different file in his desk and pull out differentpaperwork with different wording and a religious stap of approval--but from the companys internal accounting point of view, the two sets of paperwork described identical obligations about payments. Please follow the link to continue...
Posted on: Sat, 20 Dec 2014 11:37:05 +0000
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