Linked below is an article written in a journal of the Wharton school of business at the University of Pennsylvania.

It appears to address an issue which is indeed a huge problem in Shariah-Compliant Finance: Lack of Transparency.

But appearances can be deceiving.

What the Wharton article, which has no author’s name associated with it, endorses, is the establishment of ratings services to rate Islamic bonds (sukuk), which, as the article does mention, have been plagued with some high-profile defaults.

The problem with this approach is that it doesn’t even touch on the tip of the iceberg when it comes to lack of transparency in matters involving Shariah-Compliant Finance in general and sukuk in particular. These problems were best laid out by David Yerushalmi in his important ongoing work, “Shariah’s Black Box”:

There are key problems with transparency in Shariah Finance which have not been addressed by the Wharton school or others:

There is no where near adequate disclosure, by any US or Western financial institution, of the true nature of Shariah, the role of Shariah scholars (some of whom are militant Jihadists with ties to terrorist organizations) and the system of zakat and purification which has at least the potential to funnel money to Jihad.

It is disappointing that academic institutions like the Wharton School and Harvard Law School continue to show absolutely no curiosity when it comes to these issues and the true lack of transparency and disclosure inherent in Shariah Finance.


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