JIHAD WITH MONEY
CLICK ME, DHIMMISharia banking is here and growing quickly.
BEYOND THE TRANSACTION IN ISLAMIC WEALTH MANAGEMENT
As is pointed out, the Islamic banking industry has become fairly established in transaction banking (checking, savings, loans and so forth) and is now on the verge of entering wealth management and asset allocation (fancy way of saying 'investments").
Stepping into the wealth management arena will be easier than many might think. Really, all that is needed is for the bank to repackage currently existing investments so that interest paid or earned are restated as fees paid or earned. To a large extent, setting up a sharia-compliant investment is largely a matter of semantics.
And where that is not possible, there are plenty of tools available such as "interest rate swaps" where an investor can swap an stream in interest payments for a known fixed amount of "fees". It won't take a whole lot to get that done. One interesting aspect to keep an eye on will the the treatment of tax exempt financing.
Tax exempt investments (such as tax free municipal bonds) paly a heavy role in managing the tax liability of wealthy individuals. Once you get past a certain point in asset accumulation, everything you do on investments must be done with an eye toward the tax impact. Buying tax exempt or "tax efficient" investments play a vital role in managing taxability.
Well, sharia prohibits interest payments, and since most tax exempt investments revolve around the interest earned being tax exempt, I can see a clash coming one of these days. I would not be surprised to see a class action discrimination suit brought to court in the US that existing tax codes have a disparate impact against those following sharia, as they can't take advantage of the tax exempt status due to the involvement of interest payments.
~ 3 Wood
West Side Story ~ Maria ~ 1961
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