Monday, September 7, 2009

Universities Joining the Islamic Finance Bandwagon

Apparently, the Islamic finance industry was not badly affected by the global financial turmoil. One of the main reasons for this is because they are not exposed to the toxic assets that brought down most of the other banks. The resilience of the Islamic banking industry may not be fully attributed to prudent credit management or exceptional management skills; they were saved by Shariah’s prohibition of speculation, gambling (maisir) and uncertainty (gharar).

This September will see new courses and postgraduate qualifications in Islamic finance springing up throughout the UK and elsewhere in Europe. This development is sort of unusual because a few years ago, Islamic finance was viewed with extreme skepticism, often associated with terrorism and human rights abuses.

In the UK, interest in the sector reflects the government's intention to promote Britain as an Islamic finance centre. The UK already leads Europe not only in the number of locally established Islamic financial institutions but also in the number of Islamic finance training courses it offers, from entry to postgraduate level. Last December, the Treasury published a paper setting out the government's aim for London to be "Europe's gateway to international Islamic finance". This acknowledged that the industry was still young and therefore not yet experiencing skills shortages, but predicted that it soon would be.

The Guardian, (Tuesday 28 July 2009) reports that a few UK Universities have responded positively to this new opportunity. Newcastle University is offering an MSc. in finance and law with Islamic finance from next academic year. Henley Business School at the University of Reading has been offering an MSc in investment banking and Islamic finance since last year, with students spending the second part of the year in Kuala Lumpur. The University of Bangor in Wales has also been running its Islamic finance MA and MSc for a year and is considering introducing a new MBA in the subject, while the first students to take an Islamic finance option as part of an executive MBA offered in Dubai by Cass Business School will graduate this summer. Durham, which has been offering postgraduate research degrees in Islamic finance for some time, is now introducing a taught MA and MSc (the MSc is more quantitative), to respond to demand. Elsewhere in Europe, Reims Management School is offering a new specialist course in Islamic banking and finance for students on its masters in management programme, taught in English.

Strangely, two specialist Islamic Masters programmes running in the UK a few years ago, at the University of Durham and Loughborough University, were cancelled. Durham still offers a summer school and is the world's largest research hub for Islamic finance, with 25 PhDs at work at the university, but Rodney Wilson, professor of economics at Durham, says there was simply not enough demand from the right students.

Stefan Szymanski, professor of economics at Cass says "You just have to measure how many billions of dollars Islamic finance already handles in a year, if that grows over the years; it (Islamic finance) will become a universal part of every business school."

This is a good development, it bodes well for the industry, let’s hope that the universities teaching Islamic finance courses possess the qualified teaching expertise and are not in it just to capitalise on the wave of interest in the subject.

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