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Finance and Credit
 

Expansion of Islamic banking products in the global financial market

Vol. 21, Iss. 25, JULY 2015

PDF  Article PDF Version

Received: 30 January 2015

Accepted: 9 February 2015

Available online: 12 July 2015

Subject Heading: Banking

JEL Classification: 

Pages: 32-40

Danchenko E.A. Rostov State Economic University, Rostov-on-Don, Russian Federation
DEAr_910@mail.ru

Importance Since the late 20th century, Islamic financial institutions have actively appeared in the financial markets of Europe and America. Banks appear in the United Kingdom, Germany, the USA to offer products based on the norms of Islamic law. The bankers' interest stems from the need to attract customers with moral standards (negative attitude to speculative trading), and the fact that Islamic financial institutions were insignificantly affected by the 2007-2009 global financial crisis.
     Objectives The study aims to investigate the expansion of Islamic banking products and the demand for them in the global financial market.
     Methods I collected, processed and analyzed data from statistical reports of Ernst&Young and the International Monetary Fund, and identified the key trends in expansion of Islamic banks and banking products based on the norms of Islamic law. The study also includes an analysis of Islamic banks' assets for 2011-2013.
     Results The analysis of the market of Islamic banking products shows that most of them are targeted to finance social projects. This leads to an increase in production and improvement of human wellbeing through educational programs, housing construction and other priorities financing. This focus of Islamic banking products is one of the factors of their implementation outside the region of the Islamic model of banking products.
     Conclusions and Relevance The interest of Western financiers in Islamic banking products contributes not only to the adaptation of the latter to the European model of the financial market, but also leads to an increase in the volume of assets of Islamic banks in the global financial market, which in the future should result in a more stable market environment as compared to the current one.

Keywords: Islamic banks, banking products, assets, financial market, stability

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