Ministers gather in London to discuss Islamic finance

Policy makers from around the world met in the UK's capital to discuss the Islamic finance industry

London is recognised as leading the West in Islamic finance

London’s status as a leading Islamic finance centre in the West was further underscored this week, as a string of policy makers from around the world gathered in the city to discuss the sector’s growth.

The high-profile meeting took place on Tuesday, and it was the fourth time that the Global Islamic Finance and Investment Group (GIFIG) has come together in the British capital.

In a statement, the UK government described the purpose of the annual meetings as a way to “ensure that London, which is already home to the largest Islamic finance market outside the Muslim world, retains its top position”.

It is a commitment that takes on added importance at a time when London is fighting to retain its status as Europe's financial hub, with dozens of banks planning to flee the city in the wake of Brexit.

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The co-chairs of the meeting echoed the government's confidence in London’s role as a leading Islamic finance hub.

“The UK is recognised as the leading Western centre for Islamic finance, and I want us to play a big part in the future of the sector,” said Stephen Barclay, Economic Secretary to the Treasury, who led the meeting together with the Minister of State for Asia and the Pacific, Mark Field.

“London is the most globally connected financial centre, providing a nexus of expertise in financial, professional and supporting services,” he continued. “And with our strong links with other outward looking economies, including those with significant Muslim populations, we are ideally placed to play a central role.”

The meeting focused on areas where countries with an interest in Islamic finance can work better together to support the development of the industry.

Discussions also covered responses to the industry’s ongoing market and regulatory challenges and synergies between Islamic and other areas of finance.

The overarching aim, according to Mr Barclay, was to ensure “that people from all walks of life have access to appropriate finance”.

The UK indeed has a long track record of supporting Islamic finance. British firms have been involved in Islamic finance since the 1980s and the UK has been at the forefront of key developments in Europe ever since.

Over 20 banks across the country offer Islamic finance services – more than double the number located in the US. Five banks in the UK are fully Sharia compliant.

Earlier this week, a report by TheCityUK showed that Britain is the fourth most significant centre for Islamic finance among non-Muslim-majority nations - after Singapore, Sri Lanka and South Africa.

The report found that globally the market for services in the sector increased 7.5% year on year in 2015 to a record $2 trillion worldwide.

In Britain, TheCityUK estimates that assets of UK-based financial institutions offering Islamic finance services reached more than $5 billion in last year.