Counting Change.

Parker is editor of Islamic Banker.

If you doubt that Islamic banking is on the upswing, just ask the global banking majors. Powerful international banks and investment houses--names like Citigroup, Merrill Lynch, Goldman Sachs--are increasingly the depositories of billions of dollars in Islamic money. Citigroup and UBS, for example, have launched their own dedicated Islamic banks in Bahrain. Morgan Stanley is poised to launch its first Islamic equity fund in January. The fund--it'll be named Al-Thimar, meaning "the fruits" in Arabic--will be the House of Morgan's "first step towards developing a wider portfolio of Islamically acceptable investment alternatives, and reflects an increasing trend from our client base for such products," says Tarek Mooro, a managing director for the bank.

But the truth is, in an Islamic-banking culture that doesn't prize research and development, especially of the statistical variety, it's hard to know for sure. Figures are bandied about like confetti. Is the market $200 billion or twice that? It's supposedly grown 15 percent a year for the past decade, but the frequently quoted total of $200 billion has remained static. Worse yet, rules are generally opaque and regulation is spotty. One Western banker at an Islamic bank in the Middle East recently confided that when he took up his post last year, new compliance regulations had yet to be introduced. It's taken the cold realities of the post-9-11 world to drag many of these banks into setting up such protections.

This is Islamic banking's Achilles' heel. Non-Muslims, especially regulators, often find it difficult to understand why the sector doesn't have uniform Sharia standards. They're right to be perplexed. Although Islam has four main schools of law that can differ in ...