Research
ANALYSIS
NEWHORIZON April–June 2009
Islamic banks in the United States: breaking through the barriers
Abdi Shayesteh, senior associate with the King & Spalding law firm in New York and a member of the Middle East and Islamic finance practice group, takes a look at what the US Islamic finance market has to offer.
The question of whether US regulators will be accommodating towards the growth of
Islamic banking is now moot. Today, the
United States is home to at least nineteen providers of Islamic banking products and services, including retail banks, investment banks, mortgage companies, investment advisors and community-based finance providers (see the chart on pp38–39). With the estimated number of Muslims living in the country ranging from three to eight million (based on various private surveys) it now appears that real market demand and viability for offering Islamic banking products and services in the US either exists or is being developed and penetrated by these early-to-market providers.
Given these positive factors and the push by Gulf-based Islamic institutions to establish a strong presence in the United Kingdom, their absence from the US is puzzling.
One explanation is that Gulf-based Islamic institutions are most likely suffering from a mirage of barriers and a set of misunderstandings when it comes to entering the US market. One significant mirage relates to a misperception that US regulators are not interested in the growth of Islamic banking. Unfortunately, many believe that they are resistant towards the growth of the industry in the
US, just because the country’s officials are not as vocal or direct about expressing their interest as their counterparts are in the UK.
Many Gulf bankers have noted that they would like to hear the same type of ‘cheerleading’ speeches like the ones made by
1 IIBI
Gordon Brown (UK’s prime minister) or
Kitty Ussher (formerly a Treasury minister and now parliamentary under
NEWHORIZON April–June 2009
Islamic banks in the United States: breaking through the barriers
Abdi Shayesteh, senior associate with the King & Spalding law firm in New York and a member of the Middle East and Islamic finance practice group, takes a look at what the US Islamic finance market has to offer.
The question of whether US regulators will be accommodating towards the growth of
Islamic banking is now moot. Today, the
United States is home to at least nineteen providers of Islamic banking products and services, including retail banks, investment banks, mortgage companies, investment advisors and community-based finance providers (see the chart on pp38–39). With the estimated number of Muslims living in the country ranging from three to eight million (based on various private surveys) it now appears that real market demand and viability for offering Islamic banking products and services in the US either exists or is being developed and penetrated by these early-to-market providers.
Given these positive factors and the push by Gulf-based Islamic institutions to establish a strong presence in the United Kingdom, their absence from the US is puzzling.
One explanation is that Gulf-based Islamic institutions are most likely suffering from a mirage of barriers and a set of misunderstandings when it comes to entering the US market. One significant mirage relates to a misperception that US regulators are not interested in the growth of Islamic banking. Unfortunately, many believe that they are resistant towards the growth of the industry in the
US, just because the country’s officials are not as vocal or direct about expressing their interest as their counterparts are in the UK.
Many Gulf bankers have noted that they would like to hear the same type of ‘cheerleading’ speeches like the ones made by
1 IIBI
Gordon Brown (UK’s prime minister) or
Kitty Ussher (formerly a Treasury minister and now parliamentary under