Yusuf Mansur suggests that Islamic banking, which, thanks to its rather stringent standards for money management, hasn’t suffered all that much from the current economic climate, should seize the opportunity to re-brand itself before recovery lulls people back to conventional banks. He recommends setting minimum standards for the entire Islamic banking industry and aggressively marketing it as a more prudent alternative to regular banks.

Along with this article, which is one of a series that this blog has noted on how now is the time for Islamic banking to become the next big thing, goes the article below on Dubai’s imminent restructuring. Taken together, these pieces seem to represent an attitude among Arab pundits writing in English about Arab financial systems (how is that for a specific group) that now is the time for Middle Eastern financial centers and systems to make their mark. Their arguments are imminently pragmatic, although I have to wonder if Islamic banking will really draw as many converts (banking converts, that is) as they anticipate. For one, the name ‘Islamic banking’ is going to turn people off for a number of reasons, some of them having to do with Islam specifically and others having to do with religion in general. More importantly, though, what these pundits seem to forget is that Islamic banking systems are reflective of a very old mentality. It is not risky, and that is its primary strength in these renderings. It is also necessarily not innovative, not sexy, and not unpredictable. Clearly risk levels need to be scaled back - even I, as an economic neophyte, think that is pretty clear. But if doing so is done under the banner of “a return to the banking systems of 700 A.D.” then it is going to be even less appealing than it is already. Calling it the prophet’s banking system may make good copy in al Sharq al Awsat but it is not going to draw a lot of new young bright employees. The re-branding Mansur advocates would have to be pretty aggressive.