IslamicFinance.de

Patrick Imam and Kangni Kpodar note that the 9/11 attack on the US ‘had a positive impact on assets of Islamic banks, perhaps because Muslim investors, who traditionally invested in the West, were compelled to keep more money at home for fear of expropriation.

The study said that while oil prices have a positive and statistically significant impact on the diffusion of Islamic banking, the effect is likely to be asymmetric. They found that the probability for Islamic banking to develop in a given country rises with the share of the Muslim population, income per capita, and whether the country is a net exporter of oil. Trading with the Middle East and economic stability also are conducive to diffusion of Islamic banking and proximity to Malaysia and Bahrain, the two Islamic financial centers, also matters.