Faith, Ethics and Religious Norms in a Globalized Environment: Freedom of Religion as a Challenge to the Regulation of Islamic Finance in Europe

Open access

Faith, Ethics and Religious Norms in a Globalized Environment: Freedom of Religion as a Challenge to the Regulation of Islamic Finance in Europe

It is often feared that globalization is an equalizer in that it dissolves the differences between cultures, including legal cultures. At the same time we can see a counter-movement which places more emphasis on culturally or religiously based rules. A key example of this is the emergence of Islamic Finance. This trend has not only been fueled by the renewed interest in Islam since 9/11, but also due to the shortcomings of traditional financial concepts which have been highlighted dramatically in the global financial crisis. While originating in the Middle East, interest in Islamic finance is now so widespread that seminars on Islamic finance in Western financial centers are fully booked long in advance. International law firms open more and more new offices in the Middle East and, while not necessarily having entered the mainstream, in a sense Islamic finance has gained its place in the world of finance and has therefore become a concern not only for bankers but also for lawyers advising clients on financial services. In this presentation, we will first look at the Quranic sources for the need for Islamic finance before seeing how Islamic finance operates and which financial instruments have been developed under sharia law. We will see how sharia rules impact the financial industry and how they have gained a role among financial products offered around the world before turning our attention to the challenge posed by these financial instruments to regulators unfamiliar with Islamic law. We will look at how religious freedom limits regulatory possibilities. At the center of the investigation, though, will be the question as to whether Islamic finance products live up to the promises associated with them and which consequences this has for regulators, in particular those in Non-Muslim countries.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Ainley Michael Ali Mashayeki Robert Hicks Arshadur Rahman and Ali Ravalia. Islamic Finance in the UK: Regulation and Challenges. 1st ed. London: Financial Services Authority 2007.

  • Al-Rifal Tariq and Aamir Khan. "The Role of Venture Capital in Contemporary Islamic Finance." (2000) //

  • Beam Tony. "Freedom of Religion Is More Than Freedom to Worship." The Christian Post (July 21 2010) //

  • Czermak Gerhard. Religions und Weltanschauungsrecht [The Law of Religions and World Views]. 1st ed. Berlin/Heidelberg: Springer Verlag 2008.

  • Eekhoff Zylstra Sarah. "‘Freedom of Worship’ Worries-New Religious Freedom Rhetoric within the Obama Administration Draws Concern." Christianity Today (June 22 2010) //

  • El-Gamal Mahmoud Amin. "A Basic Guide to Contemporary Islamic Banking and Finance." (2000) //

  • El-Gamal Mahmoud Amin. Islamic Finance-Law Economics and Practice. 1st paperback edition reprint. Cambridge New York Melbourne Madrid Cape Town Singapore Sâo Paulo Delhi: Cambridge University Press 2009.

  • El-Gamal Mahmoud Amin. "Overview of Islamic Finance." Occasional Paper No. 4 (August 2006) ([United States] Department of the Treasury Office of International Affairs) //

  • Evans Malcom D. Religious Liberty and International Law in Europe. Cambridge: Cambridge University Press 1997.

  • Fish Stanley. "Religion and the Liberal State Once Again." The New York Times (November 1 2010) //

  • Fish Stanley. "Serving Two Masters: Sharia Law and the Secular State." New York Times (October 25 2010) //

  • Fröhlich Anne-Sophie and Claudia Stodte. "Islam von A bis Z [Islam from A to Z]." Der Spiegel Geschichte No. 5: Der Islam: 1400 Jahre Glaube Krieg und Kultur [Islam: 1400 years faith war and culture] (2010): 50 et seq.

  • Gassner Michael. "How to Balance Form and Substance-The Role of Sharia Scholars." (August 11 2008) //

  • Goy Raymond. "La Garantie Européenne de la Liberté de Religion." Revue du droit public 107 (1991): 5 et seq.

  • Grabenwarter Christoph. Europäische Menschenrechtskonvention [European Convention on Human Rights]. 3rd ed. Munich: Verlag C. H. Beck 2008.

  • Greene Richard Allen. "Mohammed tops list of English baby names." (October 29 2010) //

  • Habermas Jürgen. "Leadership and Leitkultur." The New York Times (October 28 2010) //

  • Harvey Leonard Patrick. Islamic Spain 1250 to 1500. Chicago: University of Chicago Press 1990.

  • Heiser James. "Obama Retreats from ‘Religious Freedom’ to ‘Freedom of Worship’." The New American (July 19 2010) //

  • Jobst Andreas A. "Derivatives in Islamic Finance." (2007) //

  • Jobst Andreas A. "Risk Management of Islamic Finance Instruments." QFINANCE //

  • Jobst Andreas A. "The Economics of Islamic Finance and Securitization." International Monetary Fund Working Paper WP/01/117 (2007) //

  • Jomadar Bushan K. "Islamic Finance and Securitization: Man-made Tale or Reality." Islamic Law and the Muslim World Paper No. 8-18 (2008) //

  • Kirchner Stefan. "Energiederivatehandel in Skandinavien-Voraussetzungen Zugangsbedingungen und Entwicklungspotential [Energy Derivative Trading in Scandinavia-Requirements Access Conditions and potential for Development]": 119 et seq. In: Nadine Ruppel ed. Europäisches und Internationales Energiewirtschaftsrecht Tagungsband des 9. Graduiertentreffens im Internationalen Wirtschaftsrecht in Gießen 2008 [European and international law of the energy business Proceedings of the 9th Postgraduate Meeting on International Economic Law in Gießen 2008]. 1st ed. Stuttgart München Hannover Berlin Weimar Dresden: Richard Boorberg Verlag 2009.

  • Kirchner Stefan. "Private Public Partnerships in Germany: Risk Allocation under the Concession Model." Legal Latitudes 1 (2007): 62 et seq. Kirchner Stefan. Public Private Partnerships: Das Konzessionsmodell beim Bau von Straßentunneln [Public Private Partnerships: the concession model in the construction of road tunnels]. 1st ed. Munich: Grin Verlag für akademsiche Texte 2007.

  • Lambalet Coleman Doriane. "Individualizing Justice through Multiculturalism: The Liberals' Dilemma." Columbia Law Review 96 (1996): 1093 et seq.

  • Leach Philip. Taking a Case to the European Court of Human Rights. 2nd ed. Oxford: Oxford University Press 2005.

  • Maalouf Amin. Der Heilige Krieg der Barbaren-Die Kreuzzüge aus der Sicht der Araber [The Holy War of the Barbarians-The Crusades from the perspective of the Arabs]. 5th ed. Munich: Deutscher Taschenbuch Verlag 2008.

  • Mamat Mohd Nor Siti Fatahiyah Mahamood Mohd Nazir Ahmad Aliza Ismail and Zam Hariro Jamaluddin. "E-Fatwa Information Management: Sustainance and Enhancement towards friendly and efficient online database." World Congress of Muslim Librarians and Information Scientists (November 25 - 27 2008) //

  • Netzer Miriam Sophia. Riba in Islamic Jurisprudence-The Role of ‘Interest’ in Discourse on Law and State. 1st ed. Medford: The Fletcher School 2004.

  • [No author named]. "Al-Musharaka" //

  • [No author named]. "An Uncertain Road: Muslims and the Future of Europe - Muslims and the Future of Europe." The Pew Forum on Religion and Public Life (October 19 2005) //

  • [No author named]. "Derivatives Dispute Divides Islamic Finance Market." Business Times (February 11 2009) //

  • [No author named]. "Deutsche Bank Launches Shari a Mutual Fund Capability-Initial Five Funds Unveiled in Dubai and Bahrain Today." Press Release (December 6 2006) //

  • [No author named]. "Fundamentalisten sind überall [Fundamentalists are everywhere]": 24 et seq. In: Alain Gresh Jean Radvanyi Philippe Rekacewicz Catherine Samary and Dominique Vidal eds. Atlas der Globalisierung [Atlas of Globalisation]. 2nd ed. Paris: Le Monde diplomatique 2010.

  • [No author named]. "Mehr Geld als Waren in der Welt [More money than goods in the world]": 66 et seq. In: Alain Gresh Jean Radvanyi Philippe Rekacewicz Catherine Samary and Dominique Vidal eds. Atlas der Globalisierung [Atlas of Globalisation]. 2nd ed. Paris: Le Monde diplomatique 2010.

  • [No author named]. "Migration-viele Gründe viele Grenzen [Migration-many reasons many borders]": 16 et seq. In: Alain Gresh Jean Radvanyi Philippe Rekacewicz Catherine Samary and Dominique Vidal eds. Atlas der Globalisierung [Atlas of Globalisation]. 2nd ed. Paris: Le Monde diplomatique 2010.

  • [No author named]. "Mudarabah [Mudarabah]" //

  • [No author named]. "Murabaha" //

  • [No author named]. "Obama und der Islam Verminderter Einsatz für die Religionsfreiheit? [Obama and Islam Reduced commitment to freedom of religion?]." (28 June 2010) //

  • [No author named]. "Riba" //

  • [No author named]. The Global Derivatives Market-An Introduction White Paper. Deutsche Börse Group Deutsche Börse AG / Eurex Frankfurt AG 2008.

  • [No author named]. "The Meaning of Islam" //

  • Pękala Urszula. Eine Offenbarung-viele Religionen. Die Vielfalt der Religionen aus christlicher Perspektive auf der Grundlage des Offenbarungsbegriffs Wolfhart Pannenbergs [One Revelation-many religions. The multitude of religions from a Christian perspective on the basis of Wolfhart Pannenberg's understanding of the term revelation]. 1st ed. Würzburg: Echter Verlag 2010 [Bonner Dogmatische Studien Vol. 48].

  • Perkins Tony. "My Take: President Obama's assault on Americans' first freedom." (August 16 2010) //

  • Peters Anne. Einführung in die Europäische Menschenrechtskonvention [Introduction to the European Convention on Human Rights]. Munich: Verlag C. H. Beck 2003.

  • Piotrowski Dariusz. "Instrumenty pochodne na islamsim rynku finansowym-Derivate Instruments on the Islamic Financial Market [Derivate Instruments on the Islamic Finance Market]." Bank i Kredyt (March 2007): 40 et seq. //

  • Reed Clyde G. and Cliff T. Bekar. "Religious Prohibitions against Usury." (January 21 1999) //

  • Rosly Saiful Azhar. "The role of the fatwa in Islamic finance." Investor Digest (January 16 2003).

  • Rossmanith Beate. Tolerance in the field of bioethics from a Christian view. Licentiate Dissertation. Rome: Pontifical Athenaeum Regina Apostolorum Faculty of Bioethics 2010.

  • Rowey Kent Charles July and Marc Fèvre. "Islamic finance: basic principles and structures-A focus on project finance." Freshfields Bruckhaus Deringer (London 2006) //

  • Saleem Muhammed. Islamic Banking-A $300 Billion Deception-Observations and Arguments on Riba (interest or usury) Islamic Banking Practices Venture Capital and Enlightenment. 1st ed. [No location given]: Xlibris 2005.

  • Samelson Ashley. "Why ‘Freedom of Worship’ Is Not Enough." First Things (February 22 2010) //

  • Schüwer Ulrich and Sasche Steffen. "§ 1 Funktionen und Einsatz von Energiederivaten [Chapter 1 Functions and Use of Energie Derivatives]": 33 et seq. In: Jean-Claude Zerey ed. Außerbörsliche (OTC) Finanzderivate-Rechtshandbuch [Over the Counter Financial Derivatives-Legal Handbook]. 1st ed. Baden-Baden: Nomos Verlagsgesellschaft 2008.

  • Shaukat Mughees. General Perception of Fatwa and its Role in Islamic Finance. 1st ed. Kuala Lumpur: INCEIF 2009.

  • Sly Randy. "Obama Moves away from ‘Freedom of Religion’ toward ‘Freedom of Worship’?" Catholic Online (July 19 2010) //

  • Soumare Cheikh A. The Principles of Islamic Banking [Thesis submitted to the International Institute of Islamic Banking and Economics Girne Turkey]. 1st ed. [No location given]: Xlibris 2008.

  • Stieber Benno. "Allahs Banker [Allah's Banker]." enorm No. 4 November 2010-February 2011): 112 et seq.

  • Stüssi Marcel. "Banning of Minarets: Addressing the Validity of a Controversial Swiss Popular Initiative." Religion and Human Rights 3 (2008): 135 et seq.

  • Sundararajan V. and Luca Errico. "Islamic Financial Institutions and Products in the Global Financial System: Key Issues in Risk Management and Challenges Ahead." International Monetary Fund Working Paper WP/02/192 (2002) //

  • Terwitte Paulus. Das Leben findet heute statt! Ein Anschlag auf die Vertröstungsgesellschaft [Life happens today-An attack against the society of promises for the future]. 1st ed. Reinbek bei Hamburg: Rowohlt 2009.

  • Unruh Peter. Religionsverfassungsrecht. 1st ed. Baden-Baden: Nomos 2009.

  • Von Campenhausen Axel Freiherr and Heinrich de Wall. Staatskirchenrecht [The Constitutional Law of Religions Communities]. 4th ed. Munich: Verlag C. H. Beck 2006.

  • Warner Matthew. "Obama Supports Your Freedom to ‘Worship’?" National Catholic Register (July 5 2010) //

  • Wendt Reinhard. Vom Kolonialismus zur Globalisierung-Europa und die Welt seit 1500 [From Colonialism to Globalisation-Europe and the World since 1500]. Paderborn Munich Vienna Zürich: Verlag Ferdinand Schöningh 2007.

  • Young Cathy. "Fminists' Multicultural Dilemma." Chicago Tribune (July 8 1992).

  • American Convention on Human Rights. O. A. S. Treaty Series No. 36; 1144 U.N.T.S. 123.

  • Arrowsmith v. United Kingdom. EComHR. Application No.7050/75 (1978) 19 DR 5.

  • European Convention on Human Rights (Convention for the Protection of Human Rights and Fundamental Freedoms) //

  • French Law No. 524 of July 13 2010 [prohibiting the covering of one's face in public] //

  • Haan and Chansh v. Bulgaria. ECtHR. Application No. 30985/96 26 October 2000 (2002) 34 EHRR 55.

  • Pichon and Sajous v. France. ECtHR. Application No. 49853/99 decision on admissibility of 2 October 2001.

  • Universal Declaration of Human Rights. G.A. res. 217A (III) U.N. Doc A/810.

Journal information
Impact Factor

CiteScore 2018: 0.42

SCImago Journal Rank (SJR) 2018: 0.138
Source Normalized Impact per Paper (SNIP) 2018: 0.281

Target audience: researchers and scholars in the fields of law and politics, with an acute interest in the cross-pollinations of disciplines, comparative approaches to regional issues, and active dialogue on pressing contemporary issues of theoretical and practical import.
All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 295 183 3
PDF Downloads 115 81 1