London aims for key Islamic finance Centre
With three fold growth of the global market for Islamic financial services over the past decade to a whopping US $ 531 billion up to 2006, the British capital is seeking to become the key Western centre in this regard.
According to a new report by IFSL (International Financial Services Limited) on Islamic Finance – co-sponsored by UK Trade and Investment – the cluster of expertise in London is represented by 23 banks, nine fund managers and a number of international law firms offering Islamic service while there is a secondary market in Sukuk valued at US $2 billion a month and a growing market for retail mortgage business.
IFSL’s report also found that daily trading in commodity-based agreements through the London Metal Exchange is a key mechanism for the
management of assets and liabilities by Islamic financial institutions and the 23 UK banks outnumber more than four times those of any other country in Western Europe as compared to Switzerland with five and France and Luxembourg four each
The UK is also ahead of the rest of Western Europe in establishing fully Sharia compliant banks with three of the 23 UK banks having set up there since 2004. These are The Islamic Bank of Britain, The European Islamic Investment Bank and The Bank of London and The Middle East.
Duncan McKenzie, IFSL’s Director of Economics said “Evidence of London’s growing role in Islamic finance is shown in the UK being the only Western country to feature prominently, 9th with $10bn, in a global ranking of Sharia compliant assets by country.”
The report further said UK educational institutions are taking the lead in positioning the Britain as a leading centre of learning in Islamic finance.
The Securities and Investment Institute, the Chartered Institute of Management Accountants and Cass Business School have each worked collaboratively with overseas partners to offer qualifications that can be accessed by students around the world.
The British Minister for Trade and Investment, Lord Digby Jones termed the report as ‘in depth and informative’ and said London’s position as the premier Western centre and partner of choice for Islamic finance is a huge step in the right direction.