Toby Birch is not the archetypal torch-bearer of Islamic finance. Educated at London’s City University and a fellow of the Securities and Investment Institute, Birch spent years working at private banks – Blackfish Capital Holdings, Bank Julius Baer and Mees Pierson – in the UK and Switzerland.
Somewhere down the line, his views on the subject became so “bearish” that he chose to write a book titled “The Final Crash: Addictive Debt and the Deformation of the World Economy.” But he had to use a pseudonym, Hugo Bouleau. Why? His employer, “did not want to scare the clients.” Yet Birch’s book hit the bulls-eye months before the credit crisis began. And since then, Birch has been lecturing and writing on Islamic finance as a possible solution to the West’s financial woes.
Living on the island of Guernsey just off the coast of France and working at a private family office, Birch believes that, from a philosophical standpoint, Islamic finance is the way of the future. “It is almost as though the wheels of destiny are turning toward an Islamic solution,” he says. “After all, we are entering an era of zero interest rates and a lack of liquidity.”
“This is an ideal backdrop for a system that shares risk and reward and has no need for interest – the hallmark of a now-defunct financial mechanism,” continues Birch, who holds the Islamic Finance Qualification from the Securities and Investment Institute.
The debate over Islamic finance as an alternative to conventional banking has grown intense in recent months. While it’s true that Islamic finance has been faring well in the financial crisis compared to its conventional counterpart, that’s hardly a cause for celebration. Islamic financial institutions (IFIs) are not completely insulated from problems in conventional banking. Nor is the crisis well and truly over.
More importantly, IFIs have been given a golden opportunity to seize the moment and present themselves as an important alternative. Yet they have failed to seize the initiative; they have been woefully unprepared and lacking imagination. Some say they do not have the ambition to become a more widely used alternative.

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