Islamic finance in Europe (106)

Continuation

Home financing products account for most of this demand.

Around 10,000 Shari’ah-compliant home purchases having been concluded over the past decade.

So far, in the US, Islamic financial institutions have avoided deposit-taking operations due to the regulatory hurdles involved.

The relevant regulation on banking is currently similar for all banks wanting to operate in the US, i.e. for both:

-      conventional

-      and Islamic banks.

In some cases, however, US regulators have raised the concern that banks offering Islamic financial products like murabahah may be violating rules prohibiting them from owning real estate other than:

-      their own buildings

-      and “other real estate owned”.

From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)