Friday, July 23, 2010 at 7:23PM
Islamic financial institutions continue their strong run in international capital markets. The practice of Islamic banking has changed dramatically over the past few years. As a niche industry in many small countries, the industry has reached beyond respective domestic markets all over the world. Increasingly, these financial institutions are looking to non-Muslims as clients beyond the Middle East, Africa and Southeast Asia. Legal frameworks are adapting to a new era of Islamic finance, not only in Muslim nations but increasingly to other regions of the world.
Islamic banks are venturing into other areas of high finance, including corporate banking and more sophisticated types of investment banking. New divisions within these banks are offering specialized products to meet the needs for more sophisticated financial investments still compliant with Shari’ah law.
Several governments in the gulf are continuing efforts to become controlling shareholders in rising Islamic financial institutions. These controlling stakes have led to enhanced linkages across Asia and the Middle East.
Islamic banks are also looking outward and investing abroad. With more international foreign investments, Islamic banks will be less dependent on oil revenues and interlinked in international capital movements.
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