Minouche Shafik , the Deputy Governor for Markets and Banking at the Bank of England said in a speech on Thursday, the UK Central Bank would commence work in the second half of 2015 to assess the feasibility of establishing a Shari’ah compliant facility for purposes of liquidity management.
“By providing an additional highly liquid asset for Islamic banks, such a facility would be a significant step forward in their liquidity management capabilities”. Ms Shafik said in a speech at Warwick University whilst talking of liquidity insurance provided by the UK Central Bank and lessons learnt from the financial crisis.
The UK has one of the most advanced Islamic financial markets in the western world and is quickly becoming a key destination for foreign Shari’ah-compliant institutions. The country is home to the west’s first fully fledged Shari’ah-compliant retail bank and currently has five true Islamic banks.
In 2014, the United Kingdom became the first Western European country to issue a Sovereign Sukuk with a 5 year dated £200M issuance. According to data published by Al Rayan Bank, as end of 2014, the UK was the world’s ninth largest market, the leading Western country and Europe’s premier centre of Islamic finance with $19bn of reported Sharia compliant assets. There are more than 20 international banks operating in the UK are working in Islamic finance, 6 of which are fully Sharia compliant. The UK has the largest legal services market in Europe and around 25 major law firms with offices in the UK are supplying Islamic legal services.