globeandmail.com: Let’s not write off sharia banking

When we learn that Muslim Canadians want to start a sharia bank (a financial institution governed by Islamic religious law), our immediate reaction does not have to be that it’s one more assault on the Canadian way of life. Nor must we write it off as unpractical because Islam’s social ethic forbids charging interest on loans.

Let’s remember that chartered banks are already not the only options we have for financing ourselves. There can be room for one more. As well, let’s note that a ban on interest was imposed for centuries in Europe by both church and state. That ban is even as old as the Old Testament, which forbids Israelites from charging other Israelites interest.

So, this alternative way of financing one another has a long and diverse pedigree.

Subtle philosophical arguments against interest were advanced long ago by some of the West’s most respected thinkers, such as Aristotle and St. Thomas Aquinas. Medieval popes and church councils inveighed against it for more than 1,000 years. Penalties were often imposed against usurers, as all financiers were labelled if they charged interest. The idea may come as a shock to us in an age when paying interest is as much part of everyday life as borrowing money is. But if it’s new to most of us, it’s not new to history… [Read on]