Middle East maelstrom

Middle East maelstrom


Two factors helped insulate the Islamic banks of the Middle East from the initial onset of the financial crisis: the sharia prohibition on interest-bearing investments meant they could not hold toxic mortgage-backed securities, while many institutions were more reliant on local funding than on the international wholesale market, enabling them to avoid the crippling liquidity squeeze.

They haven’t been shielded from the subsequent global recession, however, and plunging property prices have hit f

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