By Alyssa A. Lappen
A spate of conferences in the U.S. recently on Islamic banking – i.e. shari'a finance - signals a worrisome American blindness to the budding industry's inherent dangers.
Among the perils of shari'a finance, according to a January analysis by Moody's Investors Service are: A central role in investment decisions for shari'a scholars who are actually Islamic clerics; investors being forced to accept weak positions; short track records of major investors; multiple complex asset types; risky interest rates and new ventures; plus a lack of transparency combined with corporate management and risk control in the hosting Third World countries.
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