IslamicFinance.de

One of the foremost critics of the Islamic finance industry, Mahmoud Amin El-Gamal, a professor of economics at Rice University in the United States, considers modern Islamic finance to be “Shari’a arbitrage” wherein what is prohibited in conventional finance becomes permissible when deemed “Shari’a compliant” despite having similar, if not the same, economic substance. Duke University economist Timur Kuran claims that Islamic banking is based on an operational principle [of profit and loss sharing] that is simply unfeasible. There are lots of other views and opinions on Islamic finance. Those who consider it a failure point to its tendency to favor legal form over economic substance and the lack of substantive differentiation from conventional finance.