How do you assess the current financial and economic crisis and what are its main causes in your opinion?

Many observers have compared this crisis to that of the Thirties in the 20th Century. In view of its effects and consequences, I instead believe that this is the largest and most complex financial crisis in history. We have reached such a situation because of a certain lack of supervision over the manner in which things were proceeding in the financial sector. Bankers showed uncontrolled greed in quickly increasing their profits, without however correctly assessing the risks this involved, and above all within a system with effectively unmonitored system.

Has this crisis also affected the Arab world and above all the Gulf region? Where did the most critical events occur?

There have certainly been negative effects both in the financial sector and the real economies of some of the richer Arab countries, and in particular those in the Gulf area. At a financial level, many Arab investors had significant investments in American and Western companies, starting with Lehman Brothers. They lost a significant portion of their investments as happened to their colleagues all over the world. It is no secret that one bank in Kuwait, as well as other banks in the region, have experienced a number of problems, and like other similar financial institutions, in some cases risked closing if it had not been for immediate excellent intervention by local financial and political authorities which prevented even worse consequences. One must acknowledge that thanks to such intervention the Arab authorities were able to pre-empt and quickly intervene to check matters and try and revive the Gulf’s financial market. As far as the real economy is concerned, the most critical aspects certainly concern the property sector with an abrupt slowdown directly linked to the crash in the United States and other important stock markets in the EU and the rest of the world. The other critical aspect for the Arab world was the sudden fall in the price of oil, which for the Gulf area countries is a fundamental resource.

Do you think there are other consequence in addition to the concrete effects of this crisis?

The real problem now is the lack of faith our investors and ordinary people have in the global financial system and the stock markets, including the more sophisticated European and American markets. I believe this is the issue we must address, because it is essential for even debating an economic revival. This is a process that will take time and that in my opinion might start in 2010. I hope this crisis will at last lead Arab investors to greater diversification in risk investment and start at last to learn about and invest more not only in the American market, but also in European markets starting with Italy, a country my long experience leads me to believe provides an excellent opportunity. Diversification is the answer, as well as recovering the lost trust and a new process of openness in European Union countries, which I thinks should in some cases provide greater incentives for state and private Arab investments in their markets. They should, as is happening in neighbouring France, also open up to the Islamic banking system, obviously as always subject to the local supervising authorities. This is a useful system and certainly provides valid solutions for the current crisis thanks to its self-controlling mechanisms sharing risks and benefits with the client.

Why then do you think there is still not an Islamic bank in Italy?

I believe that the greatest obstacle is a lack of knowledge and understanding of the Islamic economic system, which is above all open to all ethnic groups and all religions. Islamic banks are not created just for Muslims, but the word “Islamic” only emphasises the adoption of rules established by the Shari ‘a. Compared to the past we now see a number of Italian financial institutions and banks showing interest in the Islamic banking system, and I think that gradually there will be greater openness to this phenomenon also in Italy. I would like to emphasise the United Kingdom’s long experience in this sector within the European Union. There are at least four Islamic banks operating there and others are under consideration. The Islamic banking system is experiencing continuous growth and increasingly involves people from all ethnic groups, to the extent that the British government recently introduced amendments and regulations so as to encourage the possibility of adopting Islamic financing within the property sector are well as the banking and financial world. I understand that this is taking place in nearby France too.

Translation by Francesca Simmons