A major difference between mainstream and Islamic debt looks set to be removed. There will be significant winners and losers – consumers and investors, respectively – but also, possibly, a structural shift within debt markets.

Malaysia’s central bank is drafting rules to regulate the use of ibra*, Islamic rebate, which will affect $95bn Islamic finance assets (a fifth of total banking assets or roughly half of GDP).

In Western banking, someone taking a loan is liable for the principal and the interest as it is accrued. If the loan ends early – through default or early payment – that person is typically liable for the interest accrued to date.

Not so in Islamic financing. Read more

All eyes on Abu Dhabi: the focus has shifted from the health of companies to the relationships between emirates. On this, the consensus is that Dubai’s oil-rich, older, wiser brother may “ride, but not race” to the rescue. The UAE central bank has offered to make funds available, improving liquidity. But investors want more, ideally a debt guarantee: “This isn’t just a liquidity crisis, it’s a solvency crisis.”

It’s also a confidence crisis. Read more

Decoupling? Asian economies discuss increasing intra-regional trade that is less dependent on exports to the West. Conflicting indicators from the US and warnings of bubbles in the UK Read more