UAE Setting Up Sharia Banking

Our good friends in the United Arab Emirates are setting up sharia-based banks.

Investors offered about 48 billion dirhams ($13.07 billion), almost 86 times more than sharia-compliant Ajman Bank was looking to raise in the most heavily subscribed United Arab Emirates IPO in 15 months.

Ajman Bank, whose founders include the ruling family of the emirate of Ajman, will use the 550 million dirhams it raised in the initial public offering to help finance its development as the UAE's seventh lender that complies with Islamic principles.

"There is a lot of liquidity in the market looking for good investments and all banks appreciate in value -- particularly if they are Islamic banks," Ghandour said.

So how do these places work?

UAE bank assets that comply with Islamic law, including a ban on the receipt of interest, account for about 15 percent of total, Ajman Bank Chief Executive Yousif Khalaf said last month.

Okay, so you charge fees instead of interest. I see this as a way of legally discriminating against large groups of people.

This world war will be fought to a large extent in the financial markets.