Essay on Research


NEWHORIZON April–June 2009

Islamic banking companies in the United States:

breaking through the limitations

Abdi Shayesteh, senior associate with the California king & Spalding law firm in New York and a member with the Middle East and Islamic finance practice group, uses a look at the actual US Islamic finance market has to offer.

Problem of whether ALL OF US regulators will

be accommodating towards the regarding

Islamic financial is now moot. Today, the

United States houses at least nineteen

services of Islamic banking companies

services, including retail banking companies, investment

financial institutions, mortgage businesses, investment

experts and community-based finance

suppliers (see the chart in pp38–39). With

the estimated number of Muslims living in

the country ranging from 3 to eight million (based on several private surveys) it now appears that real marketplace demand and

viability pertaining to offering Islamic banking product or service in the US either exists or is being developed and penetrated by these kinds of

early-to-market services.

Given these positive elements and the drive

by Gulf-based Islamic organizations to establish a solid presence in the uk, their lack from the US is puzzling. One explanation is that Gulf-based Islamic

organizations are most likely affected by

a apparence of limitations and a couple of misunderstandings when it comes to entering the US market.

1 significant mirage relates to a misperception that US regulators are not interested in the growth of Islamic bank. Unfortunately, effortless that they are immune towards the growth of the sector in the

ALL OF US, just because the country's officials are

not as vocal or direct regarding expressing their

interest his or her counterparts are in the UK.

Various Gulf brokers have mentioned that they

wish to hear a similar type of ‘cheerleading' speeches just like the ones of 1 IIBI

Gordon Darkish (UK's prime minister) or perhaps

Kitty Ussher (formerly a Treasury minister

and now parliamentary under admin at

the Department of and Pensions) in

the past few years – wherever London has become declared to be ‘the subsequent global centre for Islamic banking'. The main thing to note,

yet , is that because US representatives

don't offer the same sort of direct declarations, it does not show that they are certainly not interested in accommodating the growth with the industry. The truth is that US regulators possess significant constitutional, policy and economic reasons to accommodate the

growth of Islamic banking near your vicinity.

From a constitutional perspective, US regulators are (and will always be) included, in part, because it is their obligation as community

servants under the US Metabolic rate to make

sure they allow for the free of charge exercise of

religion, whilst it relates to banking techniques. There is a limit to this accommodation, however , in this the metabolism also forbids the promo of a particular

religion over another with a public official or

firm. This limit may describe why we don't

start to see the same type of direct support

from ALL OF US officials like the ones seen in

great britain.

From a policy perspective, US regulators

may have an interest in accommodating the

growth of Islamic banking as a way of

featuring banking solutions to the unbanked

population. For example , many Muslims in

the currently do not bank at a conventional lender because this violates Shari'ah restrictions for the receipt and payment appealing. US regulating involvement

Abdi Shayesteh,

King & Spalding

with Islamic-centric banks or banks that

seek to offer Islamic services and products

would be seen as a means to improve community advancement activities in such unbanked segments. Finally, from a macro-economic point of view,

the United States, just like other western countries, has every interest in attracting Gulfbased capital which has built up over the last five years due to the high oil market. Accommodating Islamic finance may be one way to lure this capital to come back...

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