London emerges as leading centre for Islamic finance: The News

By Aamir Ghauri

LONDON: London has emerged as a leading world centre for Islamic finance in the last few years and despite the financial crunch provides an example how Islamic banking can provide a safer alternative to conventional financial models.

The global market for Islamic financial services rose by 37 per cent to $729bn at the end of year 2007.

In 2008, International Financial Services London’s Islamic Finance report notes that the industry has felt the influence of the credit crunch and downturn in the global economy, Sukuk issuance has more than halved and the value of equity funds has fallen.

Islamic banks, however, have been less affected than many conventional banks as they are prohibited from activities that have contributed to the credit crunch, such as investment in toxic assets and dependence on wholesale funds.

London has been consolidating its position as the key western centre for Islamic finance in 2008.

Two Islamic banks, Gatehouse Bank and European Finance House, have been granted licences bringing to five the number of fully Shariah compliant banks in the UK.

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