After the Crisis, Could Finance’s Future Be Islamic?
9 March 2013
The world financial crisis has raised grave concerns about the ethics and governance of our ‘conventional’ financial system. Islamic finance, a mode of finance consistent with Shariah principles, has been presented by some as a viable and ethical alternative.
The Islamic finance industry seems to have weathered the storm of the crisis remarkably well. It has doubled its size since 2006. A recent IMF study shows that the business model of Islamic banks limited their exposure to the recent financial crisis in terms of profitability, credit and asset growth, and external ratings. Armed with renewed self-confidence and financial resilience, Islamic financial institutions are increasingly targeting clients in the West, Muslims and non-Muslims alike.
What are we to make of this? Will the future of finance be Islamic? Is Islamic finance ‘truly ethical’? Could it perhaps provide Christians with a vantage point from which to gain a clearer view on the strengths and weaknesses inherent in their own discourse on finance and ethics?
Biography of Johan Serré
John is doing a Ph.D. at the ETF, connected to the Institute of Leadership and Ethics. He is researching the ethics of Islamic finance and Raiffeisen (cooperative) banking. Johan is a Certified Islamic Finance Executive (CIFETM) and has over 25 years of experience in insurance and banking. As a chief internal auditor of KBC Group and coordinator of internal audit activities for Central Europe, he has first- hand experience of the regulatory, cultural and ethical impact of the financial crisis on a financial institution. Johan is also a part-time member of the project team that will implement a new policy vision for the Catholic Diocese of Antwerp