Co‐evolution and reconcilability of Islam and the West: the context of global banking

Purpose The purpose of this paper is to argue that if reconcilability between Islam and the West exists in the field of finance and if the two systems can co‐evolve in a mutually productive way, then we can be optimistic about the ability of the two systems to co‐exist. Clearly they involve different attitudes, but this paper argues, on the basis of significant compatibility issues, these are resolvable under the tradition of tolerance that has existed in Western and Islamic societies. This paper also examines Islamic finance as an alternative financial system and a potential long‐term solution to financial instability. Design/methodology/approach The paper presents descriptive, analytical and comparative analyses. Findings The paper provides insights into the Islamic and international financial system. It highlights an alternative and a solution to this dilemma in the form of Islamic finance and stresses the stability of the Islamic finance system. Practical implications The findings presented in this paper can be used by policy makers, regulators and practitioners in both the Islamic and conventional financial sector as it provides an understanding to Islamic Finance. However, to expect a wholesale transformation to an Islamic financial system is idealistic. Originality/value This paper contributes to the understanding of Islamic finance principles and its value as revolutionary departure from the current global financial system and a solution to the current and any future financial crises. The findings of this research will be of interest to Western and Islamic financial practitioners, policy makers and academicians.