May 11, 2009

Islamic finance is a viable alternative to the current economic system but its global potential has yet to be fully optimised.In stating this, HSBC Bank Malaysia Bhd's deputy chairman and chief executive officer Irene M. Dorner said there is also still a lack of understanding about the Islamic finance concept."Philosophically, it is the right solution because you will get true finance with underlying assets," she told reporters on the sidelines at the 13th Malaysian Banking Summit 2009 here Monday.

"But it is not proven that the world economic crisis couldn't happen if the world banking system is Islamic because it haven't got the scale yet across the world, that's the huge scope for Islamic finance," she said.Industry players have said that Islamic banking is safe from the effects of the global financial crisis as it is prohibited from buying debts under the Syariah law.Islamic banks also do not rely on bonds or stocks, and are not involved in the buying and selling of debt, unlike most conventional European and American banks.