Islamic inroads

Politicians and financiers in Asia are jockeying for position to tap into the burgeoning Islamic finance business, as consensus gradually emerges on the structure of many Islamic risk management instruments. But major challenges remain. By Georgina Lee

The effects of the global financial turmoil have reverberated worldwide, even touching the once-thought-immune Islamic financial sector. Growth in global Islamic banking assets, for example, is set to slow this year to around 10-15% from about 20-30% in 2008, says a November report by Moody's Investors Service, Gulf Islamic Banks Resilient Amid Global Credit Woes.

The lack of a developed Islamic interbank market and the absence of risk-mitigation techniques for Islamic banks will hinder growth