gif Islamic Finance
Prof. Nahed M. Taher Job Role: Founder and CEO, Gulf One Investment Bank Country: Bahrain
Professor Nahed Taher makes our list of most influential people for making an impact in the GCC by becoming the first female CEO of a bank in the GCC region. Her career has consisted of holding the role of Chief Economist and Chairman of the risk and portfolio management committee at The National Commercial Bank, leading to over 15 years of experience in banking, academics and re- search. She has also qualified with dual Master’s degrees in international finance and financial eco- nomics. In addition, she holds a PhD in monetary
with Prof. Nahed M. Taher 60
What are your thoughts on the future of Islamic finance?
I personally believe that the future of Is- lamic finance is rosy despite the many challenges the industry will need to over- come in order to flourish. Indeed, such a rosy picture is shared by many experts in the Islamic finance field and that is why even reputable non-Islamic agencies such as Dow Jones and Morgan Stanley have de- vised relevant indices to track the perform- ance and sustainability of Islamic finance markets globally.
The ethical nature of Islamic finance, grounded in the fundamental principles of assets-backed and interest-free transac- tions as well as the prohibition of specu- lative activities, encourages risk manage- ment and transparency and thereby shields the industry from risks of financial distress associated with excessive leverage and speculative investments that have bedev- iled the conventional financial system.
Tying financial transactions to tangible, identifiable underlying assets and interest- free arrangements can eliminate excessive debt obligations and debt burdens. These principles have been cited as the main ex- planations for the resilience of the Islamic finance industry during the recent global fi- nancial crisis, and thereby help to raise the profile of Islamic finance as a credible and viable alternative financing mechanism be- yond its traditional niches. In essence, Sha- riah-compliant assets, currently estimated at around $850 billion, have witnessed a dramatic expansion over the past decade or so, with average growth rate of between 10 and 20 percent per annum. These are expected to grow at exponential rates in
26 Global Islamic Finance April 2012
economics from the University of Lancaster in the UK.
Prof. Taher is well known in the international eco- nomics sector, having presented at a number of global economic forums around the world. She has made major achievements such as being ap- pointed a board member of the IMD in Switzerland in 2008, becoming the first member from the Mid- dle East. She was also awarded the “Business- women of the Year” award in 2007.
seconds interview…
the future as the industry continues the process of mainstreaming itself into the global financial system. Analysis of the growth prospects of Islamic finance varies markedly across major pundits, but all have envisaged Islamic finance to blossom, with estimated assets ranging from $1.1 trillion by 2012, according to Ernst & Young, to $4 trillion by 2015 according to Moody’s.
I strongly believe that these estimates are achievable or even surpassable provided that real and principled Islamic finance business could be structured properly and move beyond retail and trade financing op- erations of Islamic banking to focus more on productive Shariah-compliant invest- ment products such as private equity and project financing activities that add value to the real economy, leading to sustainable economic growth, equity and social jus- tice. However, these objectives can largely be achieved through profound changes in mindsets as well as in legal, institutional, and regulatory environments that could
attract a large number of transactions. The dearth of skilled labour force in Mus- lim countries militates against the much needed innovation as well as managerial and analytical abilities required to move Islamic finance to new heights. This is not to mention the challenges posed by limited or absent widespread Shariah-compliant, short-term Islamic money markets and highly under-developed Islamic repurchas- ing markets.
What impact have you made in the Islam- ic finance industry?
As a founder and CEO of Gulf One Invest- ment Bank “Gulf One”, a leading knowl- edge based investment bank based in the Kingdom of Bahrain, I have stressed and advocated that our operations should al- ways be knowledge-based and in conform- ity with the Islamic principles. Gulf One In- vestment Bank is committed to translating these principles into globally beneficial fi- nancial solutions through innovative mech-
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