Turkey's Islamic banks under pressure

A new financial reform bill has made its way onto the Turkish parliament's order of business. The law's main change in current practice will be to bring the Special Finance Houses (Islamic banks) under the same body of legislation as interest-bearing commercial banks. That would require that the Islamic banks purchase another six percent of the Central Bank's treasury notes (interest-bearing), tie up more of their funds in regulatory demands rather than investments, and insure investors deposits (taking away the shared risk and return). The threat of the new regulations is great for Turkey's Islamic financial institutions.