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September 15, 2007
Islamic banking
I enjoyed reading the introduction to HSBC's Islamic banking products. I was surprised how advanced the Shariah was in eliminating obvious ways of hiding interest. To me the obvious ways to hide interest would be with a forward contract or by using a late fee structure to simulate interest. Both of these are prohibited. Yet Shariah is also flexible in this area. One can use prevailing interest rates as a method to price Shariah compatible financial assets. Modern issues like independence of supervisors and differences of interpretation across countries are all examined.
Read it and learn about a new force in modern finance.
Posted by OneEyedMan at September 15, 2007 8:57 AM
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