On November 8th a great event took place in Milan. The topic was “Islamic Finance: the business and the moral case for current and future business leaders”.

The speakers were Celia De Anca, Director of the Centre for Diversity in Global Management at IE Business School, and Usman Hayat, FRM director of Islamic Finance and ESG at CFA Institute.

The speakers covered both the financial rationale behind the willingness to join the fray, and the importance of understanding a different cultural reality. Prof. Hayat will focused on the story of Islamic Finance, the current debate over it in light of the current financial turmoil, and the opportunities it faces. Prof. De Anca will developed on how MBA or Masters in Finance or Management recent (and less recent) graduates can contribute to the development of this fast growing niche.

The audience was composed by CFA members, IE alumni and candidates. The debate that arose has been enlightning, especially because many of us were new to the topic.

Some questions that have been addressed: how can banks be profitable if they are not allowed to lend money with interest, as it’s again the Sharia? How can a person following the Islamic Law buy a house, or even a car, if a standard mortgage product is not feasible? How can we structure an investment portfolio to be Sharia compliant?

Despite many preconceptions the main dictactes of Islamic Finance: focus on long term and profit sharing, are proving to be more sustainable than their “free” counterpart.

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