User:Gtrader7/sandbox

Topic: Usury in Islam

Loans are permitted in Islam if the interest that is paid is linked to the profit or loss obtained by the investment. The concept of profit acts as a symbol in Islam as equal sharing of profits, losses, and risks. (Source 1).

The Bank of London and the Middle East (BLME) have majority non-Muslim customers that receive a fixed percentage of profits, rather than an interest rate. However, critics say that sharia deposits and products are too similar to interest-rate related products, in contrast to the share of profits earned. Other explanations for the rise of non-Muslim customers in Islamic banking have been pointed towards ethical reasons in negative screening of investments like tobacco, alcohol, and arms. (Source 2)

With an increase in the Muslim population in Europe and current lack of supply, opportunities will arise for the important role which Islamic finance plays in Europe’s economy. In particular, Luxembourg is emerging as a leader and hub for Islamic funds (Source 3).

Islamic bonds, also known as sukuk, have emerged as a new financial instrument to fund ethical transactions such as the project for the Global Alliance for Vaccines and Immunisation. To support the growth is Islamic financing, governments must establish measures to create a level playing field with regards to liquid secondary markets and equal regulation and taxes that match conventional banking (Source 4)

In contrast to LIBOR, Islamic banks lend money based off their own reference rate known as the Islamic Interbank Benchmark Rate which “uses expected profits from short-term money and a forecasted return on the assets of the bank receiving funds” (Source 5)

Talk Comment: With turbulence and the rise of hateful rhetoric towards members of Islam, Islamic banking is starting to arise as a force that can tip the balance of power towards the Muslim community by aligning economic interests among the larger European population, given the attractive terms of Islamic finance and loans. Business and commerce is a universal activity among all cultures. I’d like to propose this social prediction that is an unintended consequence from the distinctness of Islamic banking. — Preceding unsigned comment added by Gtrader7 (talk • contribs) 19:44, 5 November 2019 (UTC)

Citations Source 1: Di Mauro, Filippo. "Islamic Finance in Europe" (PDF). European Central Bank: 74. Source 2: "Why non-Muslims are converting to sharia finance". The Economist. 20 October 2018. ISSN 0013-0613. Retrieved 9 November 2019. Source 3: "Islamic Finance in Europe". Deloitte Luxembourg. Retrieved 9 November 2019. Source 4: Jaffer, Sohail (22 June 2016). "Rejuvenating the European Economy: The Role of Islamic Finance". European Financial Review. Source 5: Burne, Katy (25 November 2011). "Islamic Banks Get a 'Libor' of Their Own". Wall Street Journal. ISSN 0099-9660. Retrieved 9 November 2019.