Understanding Islamic Finance

[Joanne98]

TAP talks with Frank Vogel about Sharia-compliant finance, the financial crisis, and why banking is a chance to engage with the Islamic world.

Adam Serwer | July 29, 2010 | web only

During Elena Kagan's confirmation hearings, conservatives accused Kagan of being sympathetic imposition of strict, Taliban-style Islamic law in the United States because a Islamic finance study program was established at Harvard University during her time as dean.
The American Prospect caught up with Frank Vogel, an Islamic legal scholar who helped establish that program, at a recent forum on Islamic Finance being held at George Washington University Law School by the Qatar Business Council and Arab Bankers Association Of North America. When it comes to Islamic Finance, Vogel says, Americans have nothing to worry about.

What is Islamic/Sharia-compliant finance?
Islamic finance is conducting finance in compliance with the rulings of the traditional Islamic law as to commerce and investment and property.

Where does Islamic finance come from?
Well, in the '50s, people were thinking as Muslims about how they should engage with modern finance. So a number of theories came out about what Islamic law's requirements are as to finance. These were inspired mainly by the prohibition on collecting and charging interest in the Qu'ran.

http://www.prospect.org/cs/articles?article=understanding_islamic_finance