Last November Paris-Dauphine, one of 10 best universities in Europe, opens his master of Islamic finance, six months after the closure of its flagship training for future traders. In a few months, the Qatar Islamic Bank, Islamic establishment, may open a branch in France. A first while large French banks have already invested in this segment in the Gulf, including Bahrain, through a mark of BNP Paribas and Calyon.
Its rules based on Islamic law – sharia – proved a major asset. It not only prohibits investment in sectors considered “illegal”, such as alcohol, pork, prostitution and gambling, but it also prohibits the payment of interest and speculation.Only investment in tangible assets are allowed. Result, the sector has remained aloof from the securitization of loans “subprime” and U.S. assets managed “Sharia compliant” around the world have reached a record $ 840 billion of assets worldwide according to Moody’s.In France, in the real estate sector, “3 to 5 billion inventory of assets are financed on a Shariah compliant,” observes Anwar Hassoune specialist credit risk at Moody’s and professor at Paris-Dauphine.
Lagarde’s many initiatives
A financial windfall that irrigates more but the City of London and Geneva instead of that of Paris. Without sufficient financial rules adapted to Islamic financial instruments, the France penalty to attract liquidity from the Gulf. According to a report published in late 2008 Europlace, Paris might yet priced at a few simple reforms, “acquire global leadership given the cultural proximity of France with Muslim countries” and the importance of the Muslim community. An Ifop poll for the Association of innovation for economic development, real estate, conducted in spring 2008 on a representative sample of the population, shows that 55% of French Muslims, more than 2.5 million people, are interested in a “bank offers consistent with their religious or ethical beliefs.
This potential expansion of Islamic finance is not immune to Bercy. Since taking office in June 2007, the Economy Minister, Christine Lagarde, has repeatedly mentioned the need to develop the financial sector.Slowly but surely, she has adapted legislation, including tax provisions allowing for “better welcome” real estate investors within the rules of Islamic ethics.The tenant Bercy has even met with presidents of Islamic banks. Last November, she invited them to the Ministry in the presence of elected officials and business leaders. Parmi les convives : Carlos Ghosn. Among the guests: Carlos Ghosn. The president of Renault-Nissan has stressed the importance for French companies to diversify their sources of funding. But for now, the arrangements comply with sharia law to raise funds are “expensive” with “very complex legal issues”, he fell.Obstacles to the issuance of “sukuk”, these Islamic bonds for which the subscriber receives a portion of profits from its investment and are one of the most dynamic products in Islamic finance, hamper investor interest, according to experts .
Reluctance on behalf of secularism
The necessary legislative changes are not without resistance, right and left. In October, the Socialist deputies were blocking an amendment to the Civil Code allows a holder of sukuk “able to exercise a right of ownership of media assets,” under the principle of secularism. “Do not introduce the principles of sharia, or ethics of the Koran, nor the Canon Law nor the Talmud or the Torah. Is unacceptable,” justifies Henri Emmanuelli, MP PS Landes.
Anwar Hassoune tempers and stresses that such reservations are “not confined to France. ll emerging markets of Islamic finance initially have had a reaction of distrust and even rejection. e said “Islamic finance is not there to Islamicize France, she is there to moralize financial transactions. It is not for Muslims, it is an additional compartment socially responsible finance. finding that also sounds like a marketing argument which could rebound on French institutions to attract the largest number at a time when the “socially responsible” is fashionable, and where the crisis has damaged the image of banks.
Source : lepoint (Edited)