Emergence of Islamic finance in Europe -

Abstract

In this project I will be studying the Emergence of Islamic finance in Europe. The main of the project is to test whether Islamic finance has been able to compete with conventional financial institution within the European context; in order to test this assumption the CAPM model was developed to test the Stoxx Islamic index Europe against the Stoxx 600 Index over a period spanning from 2005-2015, both were used as proxies to the markets. The results obtained within the project showed that Islamic finance have outperformed the market expectations as a whole, while slightly underperforming the market during periods after the crisis. Following the empirical tests we move on to formulating recommendations for Islamic finance to prosper in the European market as well as taking a look at the future prospects of Islamic finance in the European context.