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Monday, 27 October 2008

Islamic Development Bank - Economic crisis reinforces Islamic banking

The Islamic Development Bank (IDB) says the global financial crisis created an opportunity that can help strengthen Islamic banking.

"It is a must for Islamic finance to seize the opportunity that came with this global financial crisis," Ahmad Ali, president of the Jeddah-based Islamic Development Bank (IDB), said at a Saturday forum which saw discussions on the current financial turmoil.

"Global investment banks should be set up that realize the Islamic economy and offer the world a new vision and different way to manage assets, invest wealth and create products."

Ezzeddin Khoja, secretary general of the General Council of Islamic Banks, said the Islamic banking system is based on principles that shield the sector from the current financial crisis.

While the global financial turmoil has not had a significant impact on Islamic banks, Saleh Kamel, the head of the General Council of Islamic Banks, says the depreciation of the US currency will affect Islamic banks as they use the dollar in their transactions.

There are more than 300 Islamic banks and financial institutions worldwide with a value estimated at $1 trillion, which is expected to reach $2 trillion by 2013.

"Perhaps through this crisis, that is a great evil for the world, God will lead us to the school of moderation," said Kamel. "Communism has failed and capitalism failed, and only now are they starting to admit this failure."

The Islamic Development Bank was established in 1975 to promote the development of Muslim countries by providing funds for their infrastructure projects.
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