web analytics
November 28, 2014 / 6 Kislev, 5775
At a Glance
InDepth
Sponsored Post
IDC Herzliya Campus A Day on Campus

To mark IDC Herzliya’s 20th anniversary, we spent a day following Prof. Uriel Reichman, IDC’s founder and president, and Jonathan Davis, VP for External Relations, around its delightful campus.



Home » InDepth » Op-Eds »

Britain: ‘A World Capital for Islamic Finance’

"I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world." — David Cameron, Prime Minister, Great Britain.
london muslims

Originally published at Gatestone Institute.

The London Stock Exchange will be launching a new Islamic bond index in an effort to establish the City of London as one of the world’s leading centers of Islamic finance.

Britain also plans to become the first non-Muslim country to issue sovereign Islamic bonds, known as sukuk, beginning as early as 2014.

The plans are all part of the British government’s strategy to acquire as big a slice as possible of the fast-growing global market of Islamic finance, which operates according to Islamic Sharia law and is growing 50% faster than the conventional banking sector.

Although it is still a fraction of the global investment market — Sharia-compliant assets are estimated to make up only around 1% of the world’s financial assets — Islamic finance is expected to be worth £1.3 trillion (€1.5 trillion; $2 trillion) by 2014, a 150% increase from its value in 2006, according to the World Islamic Banking Competitiveness Report 2012-2013, published in May 2013 by the consultancy Ernst & Young.

But critics say that Britain’s ambitions to attract investments from Muslim countries, companies and individuals are spurring the gradual establishment of a parallel global financial system based on Islamic Sharia law.

British Prime Minister David Cameron announced the plans during a keynote speech at the ninth World Islamic Economic Forum, which was held in London from October 29-31, the first time the event has ever been held outside the Muslim world.

“Already London is the biggest center for Islamic finance outside the Islamic world,” Cameron told the audience of more than 1,800 international political and business leaders from over 115 countries.

“And today our ambition is to go further still. Because I don’t just want London to be a great capital of Islamic finance in the Western world, I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world.”

Cameron said the new Islamic bond index on the London Stock Exchange (LSE) would help stimulate fixed-income investments from Muslim investors — especially investors from oil-rich Persian Gulf countries — by helping them identify which listed companies adhere to Islamic principles.

Investors who practice Islamic finance — which is said to be structured to conform to a strict code of ethics based on the Koran and Sharia law — refuse to invest in companies that are linked to alcohol, gambling, pornography, tobacco, weapons or pork. Islamic finance also forbids collecting or paying interest and requires that deals be based on tangible assets.

Unlike conventional bonds, sukuk are described as investments rather than loans, with the initial payment made from an Islamic investor in the form of a tangible asset such as land. The lender of a sukuk earns money as profit from rent, as in real estate, rather than traditional interest.

Cameron says the British Treasury will issue £200 million (€235 million; $320 million) worth of sukuk as early as 2014. The objective is to enable the government to borrow from Muslim investors. The Treasury plans to issue fixed returns based on the profit made by a given asset, thereby allowing Muslims to invest without breaking Islamic laws forbidding interest-bearing bonds.

The Treasury also said some sukuk bond issues may require the British government to restrict its dealings with Israeli-owned companies in order to attract Muslim money.

Although Britain has already established itself as the leading secondary market for sukuk — the LSE has listed 49 sukuk bonds worth $34 billion during the past five years — such bonds have rarely been issued from local firms and never from the government.

“For years people have been talking about creating an Islamic bond, or sukuk, outside the Islamic world. But it’s never quite happened,” Cameron said. “Changing that is a question of pragmatism and political will. And here in Britain we’ve got both.”

According to Cameron, this “pragmatism and political will” is being influenced by the fact that Islamic finance is “already fundamental” to the success of the British economy. Indeed, it is.

Britain is already the leading Western center for Islamic financial and related professional services. It is a leading provider of Sharia-compliant finance, with reported assets of $19 billion, according to Islamic Finance 2013, a new report published by The City UK, a financial sector lobby group.

About the Author: The writer is a Senior Fellow at the New York-based Gatestone Institute. He is also Senior Fellow for European Politics at the Madrid-based Grupo de Estudios Estratégicos / Strategic Studies Group, one of the oldest and most influential foreign policy think tanks in Spain.


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

One Response to “Britain: ‘A World Capital for Islamic Finance’”

  1. Poor old G.B. Sleepwalking into a Muslim dictatorship.All for the sake of money for Cameroons pals.

Comments are closed.

SocialTwist Tell-a-Friend

Current Top Story
The Holy Ark in the Knesset synagogue.
Knesset Synagogue Bars Reform and Conservative Jews from ‘Mixed Prayer’
Latest Indepth Stories
Greiff-112814-Levaya

My son is seventeen; he didn’t want to talk about what happened, or give any details of the Rosh Yeshiva’s words of chizuk.

Protesters in Ferguson, Missouri

All involved in the Ferguson debate should learn the laws pertinent to non-Jews: the Noahide Laws.

Charley Levine

Prominent Jewish leaders acknowledged that their predecessors had mistreated the Bergson Group.

Cravatts-Richard--new

Abbas has been adding new layers of rhetoric to his tactical campaign to de-Judaize Jerusalem

The Jew’s crime is his presence.

Hamas’s love for death tried to have as many Palestinian civilians killed as possible

Israel recognizes the fabrication called a Palestinian nation; So what do we want from the Swedes?

Arab attacking Jews in the land date back a century, long before Israel was created or in control.

Creativity without clarity is not sufficient for writing. I am eternally thankful to Hashem for his gift to me.

Golden presents a compelling saga of poor but determined immigrants who fled pogroms and harsh conditions in their homelands for a better life in a land of opportunity.

It seems to us that while the Jewish entitlement to the land of Israel transcends the Holocaust, the Jewish experience during that tragic time is the most solid of foundations for these “national rights.”

Too many self-styled civil rights activists seemed determined to force, by their relentless pressure, an indictment regardless of what an investigation might turn up.

Unfortunately, at present, the rabbinate does not play a positive role in preventing abuse.

Egypt’s al-Sisi is in an expansionist mood. He wants Israel’s permission to take over Judea and Samaria.

More Articles from Soeren Kern
One of the schools found to be indoctrinating students with radical Islam in Birmingham, England.

Inspectors: pupils in some English schools are systematically exposed to radical Islamic propaganda.

Muslim young woman wearing hijab in Paris.

In Paris, the Union of Islamic Organizations congress was turned into a platform for Muslim anti-Semitism.

Instead of integration, “parallel societies are forming that continuously distance themselves from each other.”

Adebolajo said there was an ongoing “war between Muslims and the British people” and he was a “soldier of Allah.”

” All this new law does is create a raft of civil servants being paid to move mountains of papers round all day.”

“I find it shocking they won’t list everything they’ve found.” — Lawrence Kaye, Art Lawyer, New York.

“I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world.” — David Cameron, Prime Minister, Great Britain.

In a separate but related matter, the Al-Madinah School is being investigated by the government over alleged financial irregularities.

Printed from: http://www.jewishpress.com/indepth/opinions/britain-a-world-capital-for-islamic-finance/2013/10/31/

Scan this QR code to visit this page online: