Despite all the sunshine being thrown about by promoters of Shariah-Compliant Finance in the West, the so-called “insulated” Islamic markets are tumbling in the Middle East.
Monarchies in the Gulf have had to resort to injecting capital into their banking systems to prevent a crisis. This was done in Abu Dhabi and Dubai appears set to do so as well, after floating a 4% 5-year bond issue to raise capital.
Just as was the case with Iran recently, an Islamic nation which has been heavily engaged in promoting Shariah Finance has had to resort to paying interest to creditors in violation of their own principles.
Something tells me that we are not getting the whole story when it comes to Shariah Finance…