Vatican Paper Supports Islamic Finance. France Wants Its Share of Sharia Banking

In yet another act of conciliation on the part of Western religions towards Islam, the Vatican newspaper Osservatore Romano has voiced its approval of Islamic finance. The Vatican paper wrote that banks should look at the rules of Islamic finance to restore confidence amongst their clients at a time of global economic crisis. “The ethical principles on which Islamic finance is based may bring banks closer to their clients and to the true spirit which should mark every financial service,” the Osservatore Romano said. “Western banks could use tools such as the Islamic bonds, known as sukuk, as collateral”. Sukuk may be used to fund the “‘car industry or the next Olympic Games in London,” the article says.

The Vatican article is only one of many articles that have recently appeared on the acceptance by Western governments and bankers of an Islamic financing system. More than accepting it, they seem to be welcoming it, though they are certainly being pressured into this by unnamed forces bowing to the dictates of Islam.
Last December, the French Senate looked at ways to eliminate legal hurdles, particularly levies, for Islamic financial services and products in France and the potential for listing companies on the Paris Stock Exchange. Senate sources said that this area of the financial market is worth from 500 to 600 billion dollars and could grow by an average 11 percent a year.

French Finance Minister Christine Lagarde has announced France’s intention to make Paris “the capital of Islamic finance” and announced several Islamic banks would open branches in the French capital in 2009.
This hearkens back to a video from November 26, 2008 that was posted at many French websites showing Madame Lagarde announcing with (according to some bloggers) visible embarrassment the decision to allow Islamic financing in France. Whether or not this move is constitutional is apparently not even an issue, since European countries change their laws to accommodate Islam. If the “sacred” law separating Church and State can be violated, any law can. The video, with its very soft audio, shows the minister in a strange garb, and struggling to present a happy countenance. There is no way of knowing if this is merely the quality of the video, or an indication of her emotional state. An article from Le Parisien dated November 27, 2008 provides the following information, in addition to the facts presented above:

A revolution in the banking world. After London, where the first Islamic bank opened its doors in September 2004, France could authorize banks respecting sharia law to open in 2009 (...) Hervé de Charette, president of the Franco-Arab Chamber of Commerce emphasizes that “importing Islamic banking into France would help the integration process”. The main obstacle: “Islamic banking arouses fear because it is associated, wrongly, with religious fundamentalism, even with the financing of terrorism,” deplores Elyès Jouini, professor of economics at the University of Paris. (...)
The world economic crisis has changed the ball game. From New York to Hong Kong, all the financial centers on the planet are grabbing the billions of dollars amassed by the oil-rich monarchies of the Gulf. To tap into this manna (...) is the stated goal of Christine Lagarde. “We are determined to make of Paris a great center for Islamic finance,” declared the Finance Minister as she inaugurated the second French forum on Islamic banking.

For another longer English-language article, visit Islam On Line. This article goes back to July 2008, showing that even before the crisis, France had initiated a policy favoring Islamic banking.
See also:

Islamic Banking in Britain, 12 February 2007

First Sharia Bank in Switzerland, 8 October 2006

The Netherlands Want to Become Centre of Sharia Banking, 17 July 2007

Swiss Risk Losing Islamic Goldmine, 6 April 2008

Interest # 2

@ Johan B

This will be my last response to you on this matter.  While I can easily accept different opinions and mistakes from anyone, I draw the line on blatant dishonesty.  If you are putting text in quotation marks in your response to me, thereby implying that I wrote such a text, then the least you can do is to quote me accurately.  Putting forward FALSE quotations is dishonest.  I defy you to find anywhere where I wrote nonsense like "You may charge interest as much as you like, etc...".  I can see now what you mean by "seeing what you want to see".  To you that apparently seems to mean that one could write anything one wanted to write on a given subject, irrespective of whether it had, or not, any relation with any particular 'truth' or any particular text concerning that subject. 

Honest interpretation of a text, especially an ancient text which has gone through many translations and which exists in many versions, requires an HONEST ATTEMPT to understand the intent of the authors, or the spirit of the text.  It does not mean that you can read into it anything that you want to read in it.  It must relate to the actual text and to your rational (partial) understanding of how that particular text came about.  That allows for a massive amount of 'uncertainty'.

I have already clearly indicated that in my opinion the bible is concerned with individual morality, including "exploitation" of one person by another and with taking "unfair advantage" of circumstances between individuals.  How you can read into that "You may charge interest as much as you like etc..." beats me, but that is surely not an honest interpretation of what I wrote.  And you can certainly not develop any understanding of the 'spirit' of the bible by focusing on one short sentence concerning "interest". 

If you want to make fun of the "Christian God" or of the "not-so-sensible people he created", go ahead.  You are not the first, and won't be the last, to remain stuck in infantile notions about any possible God-idea.  And the fundamentalist thirst for 'certainty' afflicts unbelievers as much as believers.  But, I am afraid that you will have to learn to live with differing degrees of uncertainty.    

Your third and last paragraph was so silly that I cannot resist giving you one small piece of advice. Viewed from a philosophical perspective, blaming God (any God, be it a christian perception, or any other perception of God) for the stupidities (concerning "interest" or whatever) of mere mortals "over 15 centuries" is NOT a smart thing to do. 

Seeing what you want to see (3)

There's no need to get so furious and accuse me of dishonesty. There is a difference between the sentences You said "X" and You read those words as "X". The first X is a quote, the second is an interpretation of your view. If it is a bad interpretation, than tell us what's wrong with it, instead of continuing your habit of insulting people who disagree with you.

In my opinion the spirit of the Bible (and the Koran) is a spirit of plagiarism, ignorance and depravation. Lending at interest was criticised long before the invention of Christianity because it was considered as unearned income. Profits made without labor were regarded as unfair. The Bible copied this hostility against interest, adding the exception that 'unfairness' to foreigners was OK.
For a historic overview of the ban on interest, see here. All of the arguments that are given in favor of a ban on interest concern voluntary transactions, without any coercion or exploitation in the sense you mentioned.

One more thing. If in your opinion the Bible is only concerned with "individual morality", why than did Christ threaten us with everlasting punishment if we don't agree with HIS morality? How "individual" is the morality of people who believe that if it differs from the Bible's "the smoke of their torment ascendeth up forever and ever"?


@ Johan B

You surprise me. You claim (rightly) that "everyone who reads a bible text interprets it",  but then you do not seem to allow for any interpretation of the "ban on interest". 

I agree with you that "the sin is not in the interest but in the coercion".  Coercion may be a nonmarxist word, but it partially captures my meaning of exploitation, although I still think the latter word to be better, in the sense of being broader in scope.  I am pretty sure that the spirit of the bible is against exploitation and against taking unfair advantage, and I am not inclined to engage in a semantic discussion of the potential differences between "interest" and "usury".  I repeat that the bible, in modern parlance (marxist or otherwise), is more concerned with "market structures" than with "interest". 

I hope that you realise that there are many versions of "the bible", that translations from ancient languages over many centuries do present some real problems of "interpretation", and that the spirit of the bible is not favorable to farisees who can stick to words with amazing inflexibility.  If you want to respect the bible you will have to honor its spirit, as reflected in the many parables, and not cling to letters or individual words.

Seeing what you want to see (2)

I didn't say I don't allow for any interpretation of the ban on interest. I only said that I don't agree with your interpretation and that you reproach others what you do yourself: seeing what you want to see.

I have to admit that when a text says "You shall not charge interest" I stick to the words and interpret it as a ban on interest. What I find amazing is your flexibility to read those words as "You may charge as much interest as you like, except when it is against the spirit of the Bible," the spirit of the Bible being whatever spirit you may see in it, of course. Do you really think the authors of the Bible couldn't explain it better than that?

The result of those texts was that the Christian world had a ban on interest for more than 15 centuries. I suppose you and I agree that this ban was immoral. But whose fault was this? Was it the fault of the "not-so-sensible people" who read a text for what it said, or was it the fault of the Christian God who created the not-so-sensible people and apparently was not able to explain them what he really meant?


@ S Atkinson

I agree with you. 

Note that it was kappert - not me - who introduced the word "competition" here.   Please, re-read the discussion in its correct sequence and you will realise that you are addressing the wrong person.    

not amusing

In fact, Moshin Kahn achieved quite a respectable reputation in the fields of monetary economics and international economics.  He is certainly not "sub-developed", and the only person who seems to allow for that possibility is Kappert by failing to read carefully or accurately what others write.  Such failing reflects a lack of diligence (and yes, moral fiber) on his part.

Also, the bible is concerned with personal or individual morality, and not with societal organisation.  By contrast, "competition" can be viewed as an instrument or principle for economic organisation of society.  It should, therefore, not surprise any sensible person that the word "competition" does not feature in the bible.  Others (i.e., not-so-sensible people), will see in the bible what they want to see in it.  


Seeing what you want to see

@marcfrans: "Others (i.e., not-so-sensible people), will see in the bible what they want to see in it."

Everybody who reads a bible text interprets it, including you. Or should I say especially you, since you need marxist terms like "exploitation" and "unfair advantage" to explain what you see in the word "interest"?
If someone forces someone else to pay an interest against his will, the sin is not in the interest but in the coercion. If a borrower agrees on a high interest of his own free will, there is no "exploitation" and no "unfair advantage".

When I read Deuteronomy 23:19 - "You shall not charge interest to your brother -- interest on money or food or anything that is lent out at interest" - I don't see a ban on exploitation, I see a ban on interest. The words "unfair advantage of his or her misfortune" are not there. You see them because you want to see them.


Woudn't it depend on the time and circumstance, as to whether or not "competition", the word, is to be found in the Bible?

Perhaps it is found, not expressly stated, within the context of "self preservation", as related to an individual, or group of individuals defending their existence. Although rooted (apparently) in the Latin word "competere", it is not universally accepted as so being. Social Darwinists, amazingly, defend the notion of self-survival as being de facto competition.

Then again, "courtship" is found in the Bible as a word. Could there be no better example of real competition than that? Do you think Moses, in his attempt to lead his people from the desert, felt not a sense of real competition? Though the word itself may not be found in it's exact form, we had better believe there was some real competition going on thereabouts!

still amuzed

Moshin Khan's expertise reveals itself by his word, read this: "The IMF authors argue that Africa will have to make further reforms to sustain the recent rise in growth, especially reforms that will raise the continent 's investment rate. This means improving infrastructure, legal systems and public services, as well as further liberalising trade, tackling corruption and strengthening financial systems." Anything or anyone wouldn't agree with? Anybody would know what TO DO with these precious words?
Bible and competition: “The bible is concerned with personal or individual morality, and not with societal organisation.” Very well said, I agree.

most amuzing

I see you are all top financial experts, for whom the IMF, world bank, manhattan and frankfurt desperately are looking for! Please, apply for a CEO job. The word 'competition' should be revealed by the Bible, please help me, as I do not find it!!! (Indicate the page)
Even our 'corrector' reminds himself of sub-developped economists working for the IMF, to show his case. The only true statement comes from our 'racist', "I don't know anything about sharia banking, except that it sounds like a joke, and that I wouldn't trust their sense of honesty", while Atlanticist wonders 'who's right'. Steiner reminds that "the Popes used to sanctify bordellos as well" and still do, (please see archbishop José Cardoso Sobrinho), along with weapons and torture measures! which is adopted by marcfrans to shout 'FREELY!!!!!!!!', while I am looking at the olive trees in front of me.

Holy Mary ...(2)

@ Capo'


A 'genuflection' of guffaws  for the 'melding' of Marys.


Q. In all that is holy, why  aren't Harems Haram?

Holy Mary Magdalen!


What could the Popes' have been thinking consorting with harlots, prostitutes and the like? Hey let's have some fun, pick up some stones and see if you can just hit the Catholics coming out the bordellos.

We are easy to spot, a horny lot, devils and demons every last one of us. Actually, the way you can tell a Catholic leaving a bordello is the happy faces on the women waving out the window goodbye, sometimes they even throw money at our feet.

You said you had a point about Islamic Banking?



Please Don't Forget Me

Hey, Capodistrias, tell me, did you see me leaving one of the aforementioned places of lustful glory? That wasn't money they threw my way. Simply the gratuities which any good Catholic would never fail to leave behind as a final act of gratitude.

Did I just say that?

A revolution in the banking

A revolution in the banking world. After London, where the first Islamic bank opened its doors in September 2004, France could authorize banks respecting sharia law to open in 2009 (...) Hervé de Charette, president of the Franco-Arab Chamber of Commerce emphasizes that “importing Islamic banking into France would help the integration process”. The main obstacle: “Islamic banking arouses fear because it is associated, wrongly, with religious fundamentalism, even with the financing of terrorism,” deplores Elyès Jouini, professor of economics at the University of Paris. (...) Omg guys great discussion here. Mike from truth about six pack abs

A Safe Desposit? (Apologies to Atlanticist)

Well guys,thanks for going at it without me. We all knew this was a car bomb of a post by Tiberge. I see 'the only good Muslim is a dead Muslim' sentiments are flying, while the calmer heads have kept theirs.

I can understand worrying about a radical Mosque, school, or an Islamic auto shop that specializes in installing extra large gas tanks setting up shop in one's neighborhood but an Islamic Bank? If I lived in a Muslim neighborhood I would want to live right next door to that place. If you think about it, it's a little reassuring, but that requires one to keep one's head. Not always easy around some of the muslim nutjobs who hang around the muslim neighborhoods, nor around the girlie, girls who shriek at the mere mention of a Burkha;)

Someday if the girlie girls calm down I'll tell you all about what the Muslim mother of the Muslim girl I almost married said when she realized her daughter planned on marrying me.

The story holds the clue on how to deal with Islam in Europe or anywhere. Clue: THE ANSWER to an effective Western response to the Islamic World is what many of the girlie girls are probably saying to me right now ... yes? F? .? .? .? 'em BUT in a good way:)

@Steiner's profession of faith that the Church is always right:

I'll be happy to be your sponsor. I knew anyone who embraces Isaiah and Blake is a papist in a Protestant body just waiting for his Catholicism to be reattached :)

@Capo, of bordellos, the RCC and sharia banking

Capo, some time back, the Popes used to sanctify bordellos as well.

I presume, if you were living then, your great faith in the RCC would have us find you planted in one of these places, backing the RCC to the hilt.

Alternatively Capo, If I am wrong, please explain why you would not have backed the RCC then...

My point in regards to Roman Catholic, as well as the political leadership backing islamic banking, is that these people have their own selfish agendas, and care little of the implications to Europeans and their countries.

Like Roman Catholics faithfully backing the RCC, westerners back our political dhimmi leadership with just as much blind devotion, unfortunately to their detriment just as well.

Inanimate Objects Not The Concern

Please! You profess to worry about the Mosque, or the Islamic school, or the Islamic auto shop wherein extra large gas tanks are being installed.

Me? I'd prefer to worry about the clerics, and the teachers, and the mechanics themselves, as being the most direct threat to me, hence, to all Infidels. (if you know what I mean)

@ Capodistrias

Capo: "I can understand worrying about a radical Mosque, school, (...) but an Islamic Bank? If I lived in a Muslim neighborhood ..."

Islam is not the problem. But the existence of "muslim neighborhoods" in Europe illustrates the ongoing genocide of Europeans through race-replacement. In Europe, a "muslim neighborhood" is a place where the local population has recently been replaced by non-Europeans. Is that fine by you?

In Reply



I wholeheartedly agree with you, with regard to competition, choice and regulation.  The prohibition of usury is not uniquely Muslim, which is why the Pope's recent condemnation of the global financial system, and now this, are not surprising..  Nor does "Sharia" banking equate with terrorism.  Unfortunately, I concur with traveller that Sharia-compliant financial institutions merely substitute fees and charges for interest.  Modern financial systems are driven by rent-seeking and leverage, which have clearly not been used in moderation.  Therefore, acceptance of Sharia banking is but an attempt to bring Middle Eastern assets under European administration.




European banks are not competing for the deposits of Muslims in Europe; in fact, European Muslims must use European banks.  The prize is sitting offshore in the Gulf states.  Demographics is not at issue here.


KA: "Demographics is not at issue here"

I don't know anything about sharia banking, except that it sounds like a joke, and that I wouldn't trust their sense of honesty. About demographics, my opinion is that we should rebel against the injection by force of third-world people into our lives. The Western governments disagree with me and insist on pursuing their race replacement and race miscegenation policy. Their justifications for immigration are bogus and ever-changing. However, the previous article by Tiberge (The Eyes of HALDE) explained that the French administration is using force to prevent French people from keeping to themselves and preserving any remnant of their society. It is all the more surprising (or unsurprising?) that the government should encourage the creation of a banking industry open only to muslims. What is it they want: mandatory race mixing, or the creation of muslim enclaves with their own banking institutions?

Open mind # 2

Let's make a few easy observations.

- Armor has NOT explained what "islamic finance" is all about.  He has simply repeated an old and tired refrain, so Atlanticist's comment is on the mark.

- One may well ask or wonder whether the Vatican is well-informed on the subject matter, but I have no particular reason to doubt it.  The same applies to Tiberge.  Whatever the case may be, I do think that Tiberge is rightly justified in "worrying about the (ongoing) islamisation of Europe".  Presumably the Vatican worries about that too. 

- Many years ago, I recall having read two articles on the subject matter by a well-known then-IMF-affiliated Pakistani economist, Moshin Khan, who explained the pros and cons of "islamic finance" in terms that were understandable to rational 'western-educated' economists.  But my memory is poor, and this happened so long ago, that I can only recall that there can, indeed, be specific circumstances for certain people where islamic finance can compare favorably with other systems of finance.   

-  Traveller points to the ban on interest (riba?) in Islam and in earlier times of Christianity.  Clearly, from a narrow technical perspective, such a ban is in and of itself irrational, in as much as it amounts to a denial of the reality of scarcity of capital.  And the resulting past 'monopoly' of jews in finance helps to illustrate that.  Finance is not an example of a 'natural' monopoly, so that such (jewish) monopoly was surely bad from an economic perspective.

- I venture to say that the 'authors' of religious texts like the Koran and the Bible could not have been concerned with modern notions of "interest", but were rather concerned with the moral vice of 'exploitation' of one human by another.  Translated to a modern context that means that they were more concerned with market structures than with 'interest'.  Religion ought to be concerned with guidelines for INDIVIDUAL moral behavior (e.g. do not exploit another person or take unfair advantage of his or her misfortune and/or particular circumstances).  It should not concern itself with general prices (like 'interest') that FREE individuals FREELY pay on FREE markets to reflect the scarcity of what is being transacted. 

- None of this precludes that there might be certain particular financial practices and instruments that could be beneficially employed by certain people in certain circumstances.  The key question is whether these practices are FREELY undertaken.  And, on the face of it, there does not seem any justification for France (or any other country) to actually "favor islamic banking" over other types of finance as the article claims.  But, the French authorities  have a long history of "favoring" some over others in economic matters, i.e. of choosing winners and losers, and they are not known for market adoration.  I repeat, let the sun shine on islamic finance, or any other finance, and let free individuals decide in free markets what suits them best.  

Sifting Through The Portents

Although Tiberge has written a fascinatingly explanatory story based on the Catholic Church's position vis a vis Islamic finance, there are other bigger fish to fry.

Whilst reading, and it didn't take too long, a picture of the lava fields of Hawaii's Kilauea volcano crept into my mind (as a volcano like this would do). Curiosity seekers images standing near the new molten lava masses, also crept into view, and their quixotic behaviors were a wonder to behold. This lava flow, moving so slowly, and seemingly not an immediate threat, lay somewhere in the recesses of the seekers mind's.

Let the volcano itself represent the violence of Islam, but more importantly, let the steady flow of lava portray itself as the inroads being made in the halls of western thought and hegemony. Just as the acres of new land emerge, changing the landscape forever, let us view this as not a creeping socialism, rather a "creeping Islamism" forging ahead on it's path to world domination.

And before one concludes that there is no real, urgent threat here, think of Hawaii's other more famous volcano, Mauna Kea, rising some 13,700 feet into the air above Hawaii. Doesn't compare to McKinley, or to Everest, or K2, or Kangkenjunga, the latter three being recorded at over 28,000 feet tall, does it?

Ah, but before we concede on that point, let us remember that though only 13,700 feet of Mauna Kea is visible to the eye, the bottom of this mountain rises from it's base some 42,000 feet below the Pacific, to it's peak, making it the tallest, and most formidable mountain in the world. It is what we DON"T see that obscures the grandeur; the mammoth nature of this behemoth of a mountain. The others pale in comparison, do they not?

It is in what we see, that we are deviously led to make mistakes. It is in what we do not see, that should give to us a sampling of the magnitude of current day socio/political problems.

The lava flows onward, across our horizons, but it does so slowly, consequently there is time, we tell ourselves. Time to right the ships of state. Time to correct past wrongs. But the sands, moving as Mauna Kea's lava does, disappear from the top of the bottle, and flow into the base. This occurs inexorably, and the quaint notions of "time" being on our side, are run over by this creeping , call it what you will, Fascism, Socialism, Tyranny etc.

When only the curiosity seekers become the problem solvers, will we, as unthinkable as it is, be able to stifle the flow of foreign intrusions into our western institutional fields. It is that important. It is that vital, for if we choose not to see the mountain whole, then we shall surely see the new scape of our environment changing before our very eyes.

Fair comment

@ Armor


However, either you are right, or I am right, and if you are right, that makes both myself AND traveller wrong. Time alone will tell.

Ah well, if the Catholics back it, then it must be good!

Islamic banking is for Islamists.


But why should westerners worry?

Well, it has all to do with the nature of the beast: Islam.

The pattern in Islam is that in order to function in its society, you must become an islamist as well.


As Islamic finance gains strength, it will eliminate its competition (by using even the most horrible methods...should we be surprised?) and  begin to make new demands of those who ultimately will be forced to use it.


All in all, it will be another tool to force Islam on those who simply wish to survive financially.

Armor is right. It seems that our European dhimmi leadership is blinded by the money, and willing to do anything to get it...


The mouse trap has been set...and  how good the cheese  looks!

Even the Pope is about to sanctify it...well then it must be nothing but good...


Open mind explained to Armor

"Open mind" is not the same thing as "Empty head"...


 Your "explanation of Islamic banking to marcfrans" post  has precious little to do with the subject matter at hand and everything to do with your differences with him on the totally unrelated question of immigration and how to deal with it. Please,just admit it.




Atl911: Your "explanation of Islamic banking to marcfrans" post has precious little to do with the subject matter at hand

Because his request for technical details was not serious! He was just playing dumb and implying that Tiberge is wrong to worry about the islamization of Europe.

islamic banking explained to Marcfrans

Marcfrans: " Perhaps a simple exposition or explanation of the essential principles of islamic finance, could be attempted "

What for? If the islamics need islamic financing for their islamic community, they can get it in their islamic homelands. What is interesting is the zeal of European religious and civil authorities in encouraging islamic banking... in Europe.

" what should matter is the maintenance of free competition "

What matters is our peoples' existence.

" let the consumer benefit from competition "

The problem is that European consumers are being replaced by Arab consumers. It is absurd to care for the quality of services and not for one's own existence. From what you say, the thing that counts is the standard of living of the person living in your house, but it doesn't matter whether it is you or some Moroccan immigrant. In that case, you should try to realize that European populations have a much higher standard of living than Arabs (except in oil-rich countries). The fastest way to improve services in the West would be to expel immigrants. It would not be immoral to do so, since they have their own countries to go to. What is immoral and crazy is the idea that the existence of Europeans doesn't count.

Open mind

The mere use of a label, like "islamic finance", is not sufficient justification for condemning something one does not know or understand.  Perhaps a simple exposition or explanation of the essential principles of islamic finance, could be attempted, before condemning it?  

From the perspective of Western authorities, and their publics as well, what should matter is (a) the maintenance of free competition among different financial practices, and (b) the protection of 'ignorant' or unsuspecting financial clients.

Let the sun shine on islamic (or any other) "finance", and let the consumer benefit from competition.  


@ marcfrans

The Islamic banking was originally invented to block the Arabs from borrowing from the Jews. Since the Jews had e lending monopoly because the Catholic Church forbid interest payments, and for their own good reasons, the Jews had the whole business for themselves.
So Islam forbid interest payments and allowed only "partnerships", share the profit AND the losses.
There is not one single Islamic bank today which goes by this rule. They charge "costs" instead of interest and funny enough, those "costs" are close to our interest rates.
There is only one group which respects the original idea: the Agha Khan Foundation and they do marvelously well. It's closed to non Agha Khan members but in their community it's honestly a partnership and they work fantastically successful.