Islamic Finance – Europe’s key challenge, says Deutsche Bundesbank
The global banking industry must start providing Sharia-compliant finance products to meet growing demand and to gain new customers, legislators must ensure a level playing field for Islamic finance, and European banking supervisors working with Basel II-derived rulings must ensure that the risk weights of Islam-compliant finance products are fair and correct.
Last week, Rudolf Böhmler, Executive Board member at Deutsche Bundesbank, told an audience at the 2nd Islamic Financial Services Forum, that Europe must accept the challenge of Islamic banking. Demand had skyrocketed – 25% of the world is now Muslim – and the banks had to accept that this demand was not only in the traditional high net-worth market but was being fuelled by the growth of the Muslim middle-classes in Europe and other Western financial areas.
Böhmler used the UK as an example to show how a market for Sharia finance products can also function in non-Muslim countries. He said “Back in 2004, the Islamic Bank of Britain obtained a licence from the Financial Services Authority (FSA), making it the first Sharia-compliant bank to open for business in the UK. Since then, the European Islamic Investment Bank has been established and (…)