Competition and Scholarship

There’s been a lot going on at the school. In this issue we thought we’d share two disparate but interesting stories with you --- one about contest-winning accounting students, and one about Professor Raquib Zaman’s work on Islamic banking and the presentation he’ll soon be making at a global conference.

Accounting "Jeopardy!" Winners

"I’ll take ‘Accounting Acronyms’ for $300."

In a competition based on the TV game show Jeopardy!, IC accounting majors won first place. The first annual Green and Seifter Accounting Challenge was held in February at Le Moyne College; the IC team competed against teams from Le Moyne, the State University of New York College at Oswego, and St. John Fisher College.

Eight students from each institution participated, with four students working as a team to win points in each of three Jeopardy! categories: "Managerial Accounting," "Trivia," and "Financial Accounting." IC team members were Hristo Hadjinikolov ’02, Pamela Ayuso Hasbun ’02, Ben Giuliano ’03, Gary Kreiser ’03, Jennette Norton ’03, Totka Parusheva ’03, Chris Conover ’04, and Nicole DeVita ’04.

Though ahead after round one, the IC team went into the final Jeopardy! round tied for last place with 4,400 points, just slightly behind the two leading teams. Encouraged by their adviser, associate professor and chair of accounting Patricia Libby, the team wagered everything on the final question, which was related to accounting history. It was a lucky gamble: they were the only team to know the answer, and the win was clinched.

The event was organized by Terry McCarthy, an audit manager at Green and Seifter, an accounting and financial services firm in Syracuse, and was sponsored by Retirement Income Services in Syracuse. Judges were Grace Ghezzi, a partner with Green and Seifter; David Iles, managing partner of Sciarabba Walker in Ithaca; and Thomas Squires, deputy comptroller for audit of Onondaga County.

"I never thought we could have so much fun with accounting," said Jennette Norton, echoing the sentiments of her fellow participants. The IC team received a large engraved traveling trophy and a plaque, and each member received a Palm Pilot. Libby and students will be working with Green and Seifter to host the second annual challenge at Ithaca College next year.

Zaman on Islamic Banking

"They are a rather interesting crowd."

Dana Professor of Finance Raquib Zaman’s description of his fellow invitees to the 2002 Oxford Banking Forum is a bit of an understatement. This September, at the forum’s fourth annual executive roundtable, Zaman will be sharing a podium with the crown prince of Saudi Arabia, the president of Syria, a Nobel Prize laureate in economics, and the former British chancellor of the exchequer, in Jeddah, Saudi Arabia Hosted by the Islamic Development Bank, the forum aims to facilitate a frank discussion of foreign investment into Islamic states among senior industry executives, policy makers, and academicians, with an eye toward affecting policy-making processes.

Zaman, who has written numerous essays and lectured extensively on Islamic banking practices, will present "Islamic Banking, Finance, and Insurance: The Institutional Reforms Needed to Serve the General Public and the National Economies." In his paper Zaman argues for the Islamic banking industry’s need to reexamine traditional interpretations of Islamic law in order to bring about more equitable and competitive banking practices.

Pioneered in 1963, the Islamic banking system is deeply rooted in the principles laid out in the Qur’an 14 centuries ago. Primary among its dictates is that economic transactions should not exploit one party to benefit another; thus charging interest is strictly prohibited. Instead, Islamic banks operate on a profit/loss–sharing basis, so that the bank essentially becomes a business partner of its borrower, sharing in the venture’s risks and profits. This no-interest policy is also intended to discourage Muslims from hoarding their money in savings accounts, since making money from money, rather than from a business venture, is also frowned upon under Islamic law. Instead, the bank pays depositors a positive return periodically and at its own discretion, depending upon its own profitability.

Zaman, however, questions the popular Islamic interpretation that interest in all forms is usurious. He maintains that the Islamic banking institutions’ profit/loss sharing is, in reality, akin to the use of interest and often proves more expensive for borrowers than interest charged at non-Islamic banks. In order to follow the Islamic principles of justice, Zaman asserts, the rates charged to borrowers and paid to depositors should fluctuate, reflecting the general economic conditions and the operational profits or losses of the financial institutions.

Globally, there are more than 250 Islamic financial institutions representing some $200 billion in assets. Efforts to integrate Islamic finance into the global economy have resulted in Islamic banks’ offering a wide range of financial products, the creation of a Dow Jones Islamic Market Index, and the establishment of Islamic subsidiaries by institutions like Citibank. Yet Zaman feels that in order for Islamic banks to compete effectively in the global market place there must be some significant policy reforms, most notably dropping the restrictions on interest. He believes not only that this can be accomplished without compromising Islamic law, but also that it may actually bring Islamic banking practices into closer compliance with the Qur’an’s ideology. "If Islamic banks want to expand and compete," he says, "they are going to have to look at some of their traditional interpretations of Islamic law and decide if the current system is really ethical."

Zaman’s writing on Islamic politics and culture has been attracting broad notice recently. His essay "Islamic Perspectives on Territorial Boundaries and Autonomy," which had originally been published in Boundaries and Justice: Diverse Ethical Perspectives, edited by David Miller and Sohail H. Hashmi (Princeton University Press, 2001), will be reprinted in another book forthcoming in August from Princeton University Press: Islamic Political Ethics: Civil Society, Pluralism, Conflict, edited by Hashmi. Zaman’s essay investigates the historic origins of boundaries between the Islamic states and citizens’ freedom of movement within and between those states, and it explains ownership laws and rights of individuals and communities. "Zaman’s contribution is a thoughtful reflection on the Islamic legal traditions that shape the ideas and practices of territorial boundaries," says Maura Roessner, an editor at Princeton University Press.

Zaman is planning to spend his sabbatical in Istanbul, Turkey, this fall.