Behavioral preference for “big and bling” across swaths of the Muslim world may constrain capital-structure options for small- and medium-sized businesses. Shown here is Sheikh Zayed Road in Dubai.
Islamic Finance: A Shockwave in the Making
June 09, 2015 | Updated at September 27, 2017
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Email The Shockwave 5 was one of the world’s most expensive racing yachts, with a crew considered among the best anywhere. Yet during a routine competition off southern Australia in 2009, the 24-meter boat sailed headlong into a rocky ledge at Flinders Islet. An inquiry observed that the principal helmsman showed “no concern about the navigation situation” prior to the fatal shipwreck.
Is Islamic finance set to be another Shockwave? The business has been well-built and carefully managed by talented professionals. But as momentum in Shariah-compliant banking shifts from high-growth to maturity, industry executives could run into hazards, given the hubris spawned by their success. Visual bearing is a maritime term for “look where you’re going.” It may have prevented the Shockwa...
