20 Jan 2011

Investing with values : which ones ?

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Investing with sense and responsibility has ever been possible. It’s just a question of willing to do it and make it properly.

Islamic finance has been drawing much attention in the Western countries over a couple of years. I see two mean reasons for it :

  • it results in a better segmentation of banking services, taking into account the large high-income Muslim community in countries such as the UK for instance
  • but the biggest and most eloquent phenomenon is the growing place taken by religious criteria in the decision-making process of the wealthy Muslim population in their investment portfolio.

As a world leader in the fund industry, the Luxembourg financial place is obviously eager to pick up a piece of the growing market of the Islamic funds. What is more surprising is the interest of true European institutional investors for such products, as we have seen with German provinces (Länder) taking up Chari’a compliant long-term loans.

Would we have forgotten that the Christian rules of conduct do share the same kind of recommendations than the Shari’a regarding the handling of money ?
Some quotations from the Bible express a similar approach with the Qu’ran :
Lend without expecting repayment”. Instead of giving loans, we should give gifts” (Luke 6:35).
You shall not demand interest from your countrymen on a loan of money or of food or of anything else” (Deuteronomy 23:20).

Religion refer or are build upon the respect of values. In the current economic turmoil, values are certainly what we need the most. The Christian faith has dramatically loosing their roots in Europe and in the developed world in general. In many other countries of the Middle East, the Christians are being severely in danger (if not even killed) under the pressure of extremist groups banning any other religion than Islam.

While major banks are massively being staging competencies in Islamic finance, it is probably time to think about what we expect from values on our continent : which values do we want, what is the most appropriate authority to watch over them ?

A world without any values undoubtedly ends up to a situation of chaos, as we have experienced it with the financial practices of the last years, be it with the subprime crisis or in a more localized geographic area of India, with microfinance.

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