Islamic banking - the future?

The fastest growing banking sector in the world, operates in 70 countries and will soon have a $1trillion of assets.

Islamic banking acts in accordance to the islamic principles and is completely different to western banking. Islam prohibits riba, interest earned by moneylenders and denounces gharar which is any type of speculation. Money is supposed to be an instrument of productivity (not a commodity in itself to create more money). Gambling is banned so hedge funds and private equities and all those derivatives are frowned upon. Instead the money needs to be linked to real investments. Additionally, investors are supposed to share the risk of the lender - effectively making them a partnership - in contradiction to western banking which is risk averse meaning it diversifies or transfers the risk.

Alhamdul'llah... It also incorporates other principles such as helping the poor, (quite the opposite approach to here) and funding the pilgrimage to mecca.

Supposedly, it challenges rogue economics because it doesnt fund gambling, drugs and alcohol (the devil is in the bottle, as the koran says) or - I guess you could argue the ultimate by-product of western capatalism- porn and prostitution.

I know that the bank of Oman offers a monthly raffle instead of interest. You can win a phat four wheel drive! But the best thing, in my opinion, is that islamic banking avoids speculation which is already starting to affect food prices in a big way. It also avoids trading in debt which led to the big subprime melt-down last summer. Lastly, without interest there would be no student loan with compound interest and, much more importantly, no third world debt (poor countries are paying off more interest than the loan itself).

Insha'allah, we'll see how altruistic the principles stay, after all they are dealing with money.