Threats to Capitalism International Edition: Dateline Qatar Taxes at the QFC

Outside the QFC in the Near Future?

Asa Fitch over at The National reports some distressing news from the Qatar Financial Centre - a corporate tax of 10%.  To add insult to the "grievous" injury caused the tax is retroactive.

 

 

Qatar Financial Centre Regulatory Authority

 

Announced a refreshed brand identity today.

Sensible Advice: Islamic Finance Not Necessarily Safer Than Non Islamic

Philip Thorpe Chairman and Chief Executive of the Qatar Financial Center Regulatory Authority gave an interview to Reuters at Davos.

Some times the truest statements are the most elegantly simple.

Philip had two.

Here's the first.

It's a myth to assume Islamic finance products are safer than conventional products and underlying risks should be studied more carefully, Qatar's top regulator said on Wednesday.

I guess that here at Suq Al Mal that's the equivalent of preaching to the choir.  Thinking Islamic products are safer than conventional ones is on a par with thinking that if my borrower's name is Muhammad he's more likely to pay me back than if his name is Ganesh.

And as I commented before these structures have not been rigorously tested in courts and because of their need to incorporate asset backed elements into their structures may pose some significant legal challenges.

Here's the second:

The role of regulators is to identify risks and in some instances to become a bit more interventionist," he said.

"If we saw a product that was unsafe for investors, we would not permit it to proceed. Regulation has never been about free markets. Regulation is not a consensual act. It's a political act...Recent events may have moved the bar up in terms of regulator tolerance."

It is so refreshing to see a regulator who doesn't feel he has to apologize for regulating markets. And understands that regulations and regulators are needed because the market is not perfect.