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Islamic banking largely unaffected by subprime woes
Posted By Richard Kilner On February 5, 2008 @ 5:38 pm In Banking News | No Comments
hat tip-Margo I.
As a result, Islamic banking has been far less exposed to the subprime mortgage crisis than their non-Islamic counterparts.
Their lack of writedowns and losses could clear a path for Islamic banking to expand beyond Arabia and Asia, its traditional strongholds.
In order to ensure that all transactions are fully compliant with sharia law, scholars overlook every part of each deal.
This methodical approach has meant that there are almost never hidden risks that can be suddenly unearthed.
The governor went on to say that he did not expect prices to be affected by the credit crunch, and that the bank will renew $350m of five year Islamic bonds before July.
A pair of Islamic bonds that expire in April and May will be combined into one, and will be priced at 30-35 basis points above Libor.
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