Financial Crisis Widens the Appeal of Islamic Finance
AME Info: The financial crisis has widened the global appeal of Islamic finance as western governments and institutions attempt to tap into deposits from the Islamic world by courting Islamic Financial Institutions (IFI), which remain relatively unscathed by the sub-prime mortgage crisis.

IFIs comply with Sharia, or Islamic law. One of the fundamental principles is that it is forbidden to sell what you do not own. So unlike other banks around the world, IFIs did not trade bundles of sub-prime mortgages and therefore have no direct exposure to the sub-prime mortgage crisis.

In fact, finance that complies with Sharia now accounts for around $700 billion of assets and is growing at 10 to 30 percent a year, according to Moody's Investors Services. >>> | Monday, February 2, 2009

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Should America Bail Out Sharia Finance?
FAMILY SECURITY MATTERS: On September 17, 2008, the U.S. News and World Report magazine reported on how the "Federal Reserve extended an $85 billion loan to American International Group to be paid back as AIG sells off some business in the biggest government takeover so far in the ongoing credit crisis." What the American public hasn't seen yet is what AIG is going to sell off in terms of its business. According to the September 16, 2008 press release by the Federal Reserve on this bailout, the "U.S. government will receive a 79.9 percent equity interest in AIG and has the right to veto the payment of dividends to common and preferred shareholders."

But while the U.S. taxpayers are loaning money to AIG and the U.S. holds a nearly 80% equity interest in AIG, no one in the government seems concerned that AIG is continuing to expand its Sharia finance business. Less than a week after the government bailout of AIG, Reuters reported on how AIG's unit American International Assurance Co (AIA) was awarded an "international takaful (Islamic insurance) license" by the Malaysian government. AIG's American International has been selling Sharia-based "Islamic insurance" for at least two years, through its AIG Takaful division, since its October 1, 2006 announcement, with a stated goal to sell such Sharia financial instruments in the United States. AIG SunAmerica, AIG Financial Services Corp, and other divisions of AIG also are dealers in Sharia mutual trusts. 



The AIG bailout came two days before Congressman Tancredo's introduction of the "Jihad Prevention Act" (H.R. 6975), which "would deny U.S. visas to advocates of 'Sharia" law, and expel Islamists already here." This House bill has been referred to the House Committee on the Judiciary. Yet as the AIG bailout shows, the challenge of Sharia is more than an immigration problem, and the U.S. federal government is not yet taking any action on Sharia finance. While we should be concerned about "Islamists" coming to the U.S. to promote Sharia, shouldn't we be really concerned that the U.S. taxpayers own a nearly 80% equity interest in a company promoting Sharia finance today? Shouldn't the first assets that AIG should have sold two weeks ago have been their Sharia finance businesses? Should America Bail Out Sharia Finance? >>> Jeffrey Imm | October 6, 2008

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