Islamic banking

Islamic revivalism has spurred the creation of Islamic banking and finance. Islamic banks utilize equitable risk sharing instead of riba, which shari`a prohibits. Islamic banks do not strictly apply shari`a, but act as financial intermediaries in an Islamicized way. Elasticity and short-term liquidity present problems for Islamic banks. Islamic banks use different financial instruments, but primarily depend on murabaha . Regulatory authorities have different relationships with Islamic banks in each Muslim country. The international banking community believes Islamic banks to be only nominally Islamic. Islamic financial institutions use Islamic banks, investment companies, and solidarity companies to mobilize funds. Islamic institutions are too young and too dependent on host countries to speculate on their future growth. Islamic and conventional banks are increasingly accommodative, and the level of this accommodation will determine the future of Islamic banks.