The head of the Union of Arab Banks likes to tell stories. Fictional stories. He is the latest in a long line of Islamists who have been spreading propaganda about “Islamic finance” being immune to the impact of the current global economic downturn.
Adnan Yousef claimed in a recent speech that the global financial crisis had no impact on Islamic banking.
Regular readers of SFW may recall that we profiled Adnan Yousef back in June:
I guess Adnan missed this report:
“Liquidity Woes Menace Islamic Banks”
https://shariahfinancewatch.org/2009/04/14/liquidity-woes-menace-islamic-banks/
And I am sure he overlooked this one too, since I wrote it:
“Shariah-Compliant Finance as a Safe Haven: Myth and Reality”
But Adnan also forgot about the report that RGE Monitor put out back in May, which we chronicled on SFW:
https://shariahfinancewatch.org/2009/05/11/stress-testing-shariah-compliant-finance/
Adnan is also evidently ignorant of the troubles in the sukuk, or Islamic bond, market:
“Defaults Pose Latest Snag in Islamic Bond Market”
https://shariahfinancewatch.org/2009/06/18/defaults-pose-latest-snag-in-islamic-bond-market/
“Sukuk defaults expose pitfall in Shariah-Compliant Finance”
Things got so bad in “Islamic” markets back in March, that Dubai actually floated conventional bonds…
https://shariahfinancewatch.org/2009/03/10/islamic-markets-tumble-dubai-floats-conventional-bond/
At that same time, Qatar had to bail out its Islamic banking system:
https://shariahfinancewatch.org/2009/03/10/qatar-to-prop-up-its-banking-system/
Bahrain Islamic Bank posted a loss in Q2:
https://shariahfinancewatch.org/2009/07/15/bahrain-islamic-bank-posts-loss/
In fact, Islamic bank earnings have been impacted in other places as well, but the state-controlled press in Islamic nations go to great lengths to conceal the facts:
https://shariahfinancewatch.org/2009/08/14/more-spin-on-islamic-bank-earnings/
The evidence is overwhelming: Shariah-Compliant Finance is in no way immune to the market forces which have created the global economic downturn and Shariah-Compliant Finance should not be regarded as any kind of safe haven at all.
Those who claim that Shariah Finance is in fact a safe haven are LYING.
