Turmoil in the financial sector has led various economies to look into the functioning of Islamic finance and the possibility of opening up to it, France being the latest.
The Union of Arab Banks is working with the French administration in this direction, Secretary General Fouad Shaker told Emirates Business yesterday.
"We see there is a vision for Islamic banks, like in the UK that has agreed to have Shariah-compliant banks. France is following the same pathway, and we are working very seriously with their administration on that," he said.
Elaborating on the role of the Union, Shaker said it was providing the French Government with details on Shariah finance.
"We are widening the scope of their understanding as an advisor so that whether or not to accept it in a neutral environment is their decision. They are studying it from risk perspective," he said.
The present crisis, said Shaker, had shown that Islamic finance stood on a stronger ground. "It is because all its activities are related to real transactions. The problem of traditional banking is derivatives and other instruments, which is financial engineering, that fluctuated highly."
Within a short period, Arab banks, whether Islamic or traditional, had been quick in adopting corporate governance practices.
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