European interest in Sharia compliance is increasing as corporates seek ‘ethical investment’ for their stockpiles of cash, writes Barber in ‘Islamic Finance: a longer-term option for corporates’. Although there are numerous advantages of Islamic finance, such as greater transparency and enhanced risk mitigation, the development of the market faces a number of challenges, including its restrictive nature and a lack of uniform regulations. In this article Barber provides a comprehensive view of the current state of play of the Islamic finance sector with regards to corporate cash management, and assesses the issues that may affect the use of Islamic instruments in European countries.
In his second article, ‘Strategic Treasury: the cost of playing it safe’, Barber examines the cautious behaviour of businesses as they prioritise the security of deposits over returns. He argues that protective tactics applied in response to today’s global economic uncertainty – such as hoarding cash with zero interest rates – will in fact deter a business’s success. The article also discusses the broadening remit of treasurers since the 2008 financial crisis, and suggests how businesses can optimise overall treasury management.