I had an engagement with a consulting client the other day in Saudi Arabia. This was a newly launched bank, backed partly by the government. It is one of a rising number of "Islamic banks" that now proliferate across a number of geographies, not just throughout the Middle East, but in London and New York, as well. Islamic banking differs from traditional, Western banking, in a number of ways, some small and some large. The Koran specifically forbids charging interest on loans, for instance, so when a customer wants to finance a car, an Islamic bank would buy the car for the customer, then sell it to him one month at a time.
One feature of Islamic banking that got my attention was the high emphasis placed on fairness for the customer, and on making sure that the profits from jointly financed endeavors are justly distributed. In fact, in order to qualify as a true Islamic bank, a bank must have a religious authority sitting on its board, or playing a role as a prominent advisor. This imam's duties include overseeing the bank's processes to ensure that they properly reflect the religious principles of Islam.
It would be as if Citibank had on its board a Christian minister, whose job was to ensure that the bank's policies were fair to consumers and that its practices correctly reflect Christian religious principles.
I'm reminded of the role that Quakers played in the rapid development of 17th Century North American trade. Quakers believed so strongly in being fair to all that other, non-Quaker traders preferred dealing with them, just to be sure they weren't cheated.
Every free-market economy is made possible on some level by plain, old-fashioned trust, and Islamic banking seems to me to be a reasonable way to facilitate it.