A side issue of events in Turkey and Egypt has been the impact, if any, on the prospects of Islamic finance, given certain sensitivities. It is only in relatively recent times in both countries, even within the past year, that steps have been taken to further establish Sharia-compliant banking institutions, and pave the way for sovereign sukuk debt issuance. It appears, however, that the sector’s expansion should not be especially affected by the political tensions, a sign not only of the market requirement for Islamic products at retail level, but also the institutional awareness, politically and financially, of the investment and national funding flows that might be tapped. Michael Grifferty, president of the Gulf Bond & Sukuk Association in Dubai, says it is too early to say whether Islamic finance will “fall into the political mix” in Egypt, but in Turkey, where the severity of the turmoil has been contained, he doesn’t “see any negative effect at all”. Khalid Howladar, senior credit officer at Moody’s, advises that “while political instability can severely impact the operating environment for banks, the long-term trends and opportunities for the sector remain strong”.