As the wealth of certain oil driven countries continues to grow, western banks set their sight's on tapping into that market via sharia compliant products.
"After a few years of strong growth focused largely in the Middle East, a new generation of Islamic bank startups is setting its sights on the West."
And as the wealth of Gulf countries swells with skyrocketing oil prices, more Western banks, including some Canadian banks, are looking to those pools of capital. Banks such as Citigroup Inc., Lloyds TSB Group PLC, Deutsche Bank AG and Barclays PLC are now offering services along Islamic finance lines. In the Muslim world, some have partnered with local sharia banks to form joint funds. In the West, London ranks as the leading Islamic banking centre, with conventional banks, such as HSBC Holdings PLC, opening Islamic banking units.
“Islamic banking is growing faster than any other sector of the banking industry and the West is just starting to wake up to its potential,” says Anouar Hassoune, a Paris-based senior analyst with Moody's Investors Service who specializes in sharia banking."
As banks continue to compete for that business (and profit) then the sharia influence will continue to grow in the West. The first step is to demand sharia compliant products. The next step could be to demand a 100% sharia compliant bank, including employees. You would then have banks unable to go to the Fed window for a Fed Funds loan overnight for liquidity reasons, and would be dependent upon other sharia banks.
That could impact the ability of the Fed to conduct monetary policy.
Many years ago when I worked in banking we used to say "If you owe the bank $100,000 the bank owns you. If you owe the Bank $100 million then you own the bank."
Think about it, folks.
~ 3 Wood
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