| Submit your comments on this article |
| Home Front: WoT |
| US Treasury appoints adviser on Islamic finance |
| 2004-06-02 |
| The U.S. Treasury, which some Muslim groups have accused of bias, on Wednesday said it had appointed an Arab economist as its first in-house scholar to boost understanding of Islamic banking. The move follows concerns after the Sept. 11, 2001, attacks that terrorist financiers could be using Islamic institutions such as banks, charities or informal money brokers to move, store or launder funds destined for militant attacks. The Treasury said Mahmoud el-Gamal, an economics professor at Rice University in Texas, would be the principal adviser on Islamic finance to senior Treasury officials and liaise with international groups seeking to monitor and create standards for Islamic finance. "With the recent growth of the Islamic finance industry, deeper understanding of Islamic finance is a priority for this administration," Undersecretary for International Affairs John Taylor said in a statement. Islamic financial institutions range from banks, which operate in accordance with Muslim Sharia laws to traditional "hawala" brokers who generally work on an honor system with little or no paper trail. Since the Sept. 11, attacks, the Treasury has sought to dry up the sources of terrorism funding, moving to block the assets of more than 300 groups and people -- many of them Muslim -- believed to have committed, threatened or supported terrorism. The United States, along with other governments, has also pushed to register "hawalas" it believes may also be a conduit for terrorist funds around the world. Many Muslim groups feel they have been singled out for scrutiny by U.S. officials, including the Treasury, since the Sept. 11 attacks and some charities have accused the government of staging a "witch hunt" against them. The Treasury denies such accusations and says it has reached out to the Muslim community to ensure better understanding and cooperation. Salam al-Marayati, who heads the Muslim Public Affairs Council advocacy group, said he hoped Gamal’s appointment would help iron out some of the problems faced by Islamic groups in the post-Sept. 11 era. "We welcome the appointment. This is a positive response to our call for the Bush administration to appoint American Muslims to policy-making positions in government," he said. Treasury said Gamal would conduct workshops for U.S. government agencies on Islamic finance, including overviews of the industry, prudent supervision and regulation, accounting standards, government practices and debt management. While mainly practiced in the Middle East and Asia, the Islamic finance industry is growing in Europe and North America, Treasury said. Islamic banks are banned from many conventional financial instruments by religious strictures. For example, Islamic laws forbid the payment of interest, which is considered usury, and Islamic banks cannot invest in interest-bearing instruments. Gamal has previously worked as an economist at the International Monetary Fund and taught at the University of Wisconsin, California Institute of Technology and the University of Rochester. |
| Posted by:TS(vice girl) |
| #3 I read an article once that explained how a "pious" Moslem could buy a house without paying interest. I'm no financial expert, but it was evident even to me that it was a huge con game, I suppose aimed at fooling Allan. They still paid more than the purchase price of the house - they just called it something else. Nice religion - you lie to yourself and try to fool your diety. Sure, I'll sign right up. (NOT) |
| Posted by: Barbara Skolaut 2004-06-02 11:31:21 PM |
| #2 They don't charge interest. Although, interpretation of what constitutes interest varies. E.g. a discount note technical doesn't charge interest, although effectively it does. So is it allowed? From a practical perspective, banking is not possible without interest. Islamic banking is a oxymoron. The so called Islamic banks are either venture capital type entities (i.e. not banks) or they charge some kind of hidden interest as in my discount note example. |
| Posted by: Phil B 2004-06-02 10:16:25 PM |
| #1 So how does "Islamic banking" work better than normal banking if the banks can't make money through interest? And aside from that, is "Islamic banking" any different than "normal banking"? Do their collection agents blow themselves up at your house if you don't pay on time? Or is "Islamic banking" a euphemism for what's been called the "money-favor nexus," what the Middle East calls "Business as usual for those in power" and we call "corruption"? |
| Posted by: The Doctor 2004-06-02 9:42:47 PM |