London and sukuk: the lessons of Malaysia | beyondbrics

London and sukuk: the lessons of Malaysia | beyondbrics:

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The UK’s decision to launch an Islamic bond has been a long time coming. For a decade the prospect has been raised at the many Islamic finance conferences that have been held in London; Ed Balls, when he was City of London minister, announced the first Shariah-compliant government bonds from the UK Treasury back in April 2007.

The rationale then, as now, was to bolster London’s standing as an international financial centre. The logic then, as now, was that London ought to offer everything it can to financial markets, and that if launching a sovereign sukuk bond helps to create a benchmark for others to issue against, then that’s what it should do so as not to miss out.

As David Cameron said on Tuesday: “When Islamic finance is growing 50 per cent faster than traditional banking and when global Islamic investments are set to grow to £1.3tn ($2.1tn) by 2014, we want to make sure a big proportion of that new investment is made here in Britain.”"

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