Sandra Antoniazzi

Islamic banking system of the Arab Gulf States. Regulation, supervision and relations with the European Union

  • Abstract

Informations and abstract

Keywords: Islamic Banking System; States of the Gcc; Regulation and Supervision; Relations with the Eu.

The essay examines the particularly advanced banking system of the Gulf Cooperation Council Countries in the context of Islamic law, which significantly affects the discipline of banking and financial activities, subject, however, to some influences of Western law for the relevant insertion in international markets. The rules of "sharì'a" apply, in fact, to the economic order and are the reference for the criteria of regulation and supervision of Islamic banks for the compliance of financial instruments ("sukuk") and the mechanisms of investment funds. The study allows some profiles of comparison and connection with the European scheme of conventional banks precisely for regulation and supervision and a possible contact, given that these Countries have been inspired by the Eu and apply international standards (Basel III requirements) through a «supranational» supervisory authority and other bodies of a public nature, but with the necessary adaptations for "sharì'a"-compliance. There are also particular considerations regarding the effects of the financial crisis on Islamic banks that have shown a positive reaction, at least in the initial stages, for stability, profitability and liquidity, less favorable later in the context of real economic crisis. Some particular features may have contributed to isolate these banks from the financial crisis due to the imposed restrictions and practices of "sharì'a" guarantee committees, such as the prohibition of "riba" which prevents the receipt or payment of any fixed rate of fixed return; this principle has led to the non-conformity of the instruments of speculation c.d. «toxic», considered the main cause of the global crisis.

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