Author: Abhishek Kumar

Market Overview
June, 2009  -  Doc # FIN218657
Number of Pages: 15
Number of Figures: 13

This Financial Insights report provides an update on the overall performance of Islamic finance in the Asia/Pacific region during these times of economic crisis. The current unstable financial environment spurred by the U.S. subprime crisis is a perfect opportunity to gauge the effectiveness of Islamic finance as an alternate financial system to conventional finance.

Abhishek Kumar, senior research analyst, Asia/Pacific Banking Advisory Service, notes, "The true test of any financial system is to see how it performs in a crisis. Initial statements of Islamic finance faring significantly better during the current economic turmoil have proven to be premature for Asia/Pacific."

Research has shown that though Islamic finance may have been spared the direct impact of the subprime fallout, the indirect impact has clearly affected the performance of shariah-compliant financial products and services. Kumar concludes, "Despite such occurrences, Islamic finance in Asia continues to grow at a rapid rate with countries such as Indonesia and Pakistan working diligently to nurture Islamic financial assets and replicate the success seen in Malaysia."

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Asia/Pacific Banking Advisory Service

Asia Pacific (regional research excluding Japan)

Insights: Financial, Banking