The paper examines the regulatory accommodation process of Shari'a-compliant financial institutions within the Italian legal framework.The paper is divided into four sections. The first two sections adopt a business-based approach drawinga comparison between the Islamic and the Italian banking models in terms of institutional and functional requirements. The third section suggests that Shari'a rules and, as a result, Shari'a-compliant financial operations, represent a cultural phenomenon, where "cultural" means that Islamic finance is a set of ways of thinking and behaving which every Muslim endorses step by steps thanks to the educational process.In the conclusions it is argued that the Italian legal system poses no formal hurdles to the accommodation of Islamic financial entities.

Purpose The purpose of this paper is to contribute to the existing body of work in the area of Islamic banking by investigating the regulatory accommodation process of Islamic banking in Italy. Design/methodology/approach The method used is essentially based upon an analysis of laws, regulations and jurisprudence/legal doctrine. Findings In Italy, where Muslim represent, from a religious point of view, the second largest immigrant community, no Shari’a-compliant institution has been authorised yet, but no legal obstacle is laid down. Research limitations/implications The paper examines the accommodation process of Shari’a-compliant banking within the Italian system of banking and business law. Therefore, the paper is mainly based on the Italian jurisprudence/legal doctrine. Moreover, no comprehensive analysis of Islamic banking principles is provided. Practical implications The paper, investigating the accommodation process of Islamic banking in the Italian banking system, shows any legal and regulatory obstacles refraining Muslims living in Italy from living according to Islam and complying with the general regulation of undertakings. Originality/value Examination of the topic is originally undertaken because the investigation of Islamic banking in the Italian legal framework matches the business-based approach with the cultural-based approach as complementary analyses.

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