Event Reports

A Window of Opportunity for Islamic Finance

KAS hosts Economic Policy Talk with Simon Gray, DFSA

With conventional financial systems struggling to master the global financial crisis, alternative economic models such as Islamic Finance have become more interesting. “The obvious failures in the conventional financial system have created a willingness to listen to alternatives. Islamic Finance is given the opportunity to proof itself and to play a key part in world economy,” stated Simon Gray, Director of Supervision at the Dubai Financial Services Authority last night in his presentation “Responsibility in Islamic Finance“ hosted by the KAS Regional Programme Gulf States in Abu Dhabi.

While Islamic Finance has seen double digit growth rates over the past years it still accounts only for about 1% of investments compared to conventional finance. Simon Gray explains that conventional and Islamic financial systems can indeed compliment each other. However, Islamic Finance will have to make some adjustments to be able to increase its market penetration rate.

As the Shari’a is not a codified system but rather a set of core principles that are open to interpretation by the respective Shari’s scholars, conventional finance advocates feel that there is a certain degree of uncertainty inherent to Islamic Finance, said Gray. Therefore, it would be advisable for Islamic Finance Institutions to seize the opportunity and define more definite standards. “Now is the time for Islamic Finance institutions to take part in the process of formulating new financial standards worldwide. If it is not part of the process it will live in a world created by others with less freedom of maneuver”, concluded Gray.

For the entire presentation by Simon Gray’s please refer to the posted link in the column to the right.

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