How the West Came to Run Islamic Banks

It may come as a surprise to some that when wealthy Muslims have millions of oil dollars to invest they are increasingly turning to subsidiaries of giant Western banks like Citigroup to manage their money. Attracted by oil money and the desire to participate in the Middle East’s fastest growth in a generation, Western banks have successfully established Islamic subsidiaries that are dominating the market for financing that follows the guidelines of Qur’anic law. Given the specifications concerning what Muslims may and may not do with their money, it may seem remarkable that Western banks could provide the proper services or even be trusted to do so. In fact, Muslim investors are often suspicious of Islamic banks themselves and attracted to the sophistication and international reputations of Western banks. Furthermore, to ensure their viability, the Western banks’ Islamic subsidiaries have hired top Sharia scholars to sit on their boards and lend their reputations and approval to financial products and practices, ensuring that Muslims can invest with confidence and religious correctness. Of note is the fact that this phenomenon accelerated rapidly after 9/11, when many Muslims extradited their money from the US. International banks followed this financial exodus by investing in Islamic funds. Whatever the impetus, this cooperation between the Muslim world and the West may catch some people off guard as attention continues to be focused on violent conflicts in the Middle East. – YaleGlobal