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Allah and Mammon

Islamic scholars debate the best way around the ban on interest amid the oil boom.

Capitalism runs on capital. So, what do you do when your religion forbids loaning money, but your economy is flush with cash due to rising oil prices?

Islamic scholars are debating just how to get around the ban on usury, or lending with interest. And a recent ruling by an Islamic scholar has thrown a wrench in what had become accepted practice. The International Herald Tribune reports,

Islamic banking assets outside Iran totaled $400 billion to $450 billion in 2006 and are projected to rise to $1 trillion by 2010, according to a recent report by McKinsey & Co. Total assets, including those in Iran, totaled $750 billion in 2006, a small fraction of global financial assets, but one that is growing quickly.

Experts say growth has been driven by booming Persian Gulf oil revenue, Muslims' growing preference for an expanding range of Shariah-compliant products and increasing acceptance of Islamic banking practices by financial regulators around the world.

Unfortunately for the industry, "one of ...

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