Earlier today, I spoke at the World Islamic Economic Forum in Dubai and set out what further steps we are undertaking to cement Britain’s position as the Western hub for Islamic finance, including UK Export Finance being able to provide Shari’ah compliant support for British exporters in the next few months.
UKEF expects to provide a Shari’ah compliant guarantee for financing issued by an Airbus customer. This will be the first time UKEF has provided a Shari’ah compliant Sukuk guarantee, and it will be the first such bond issued for the aviation sector that has benefited from an Export Credit Agency’s support.
I also welcomed the Bank of England’s announcement that it will look at establishing Shari’ah compliant liquidity facilities to help Britain’s Islamic banking sector grow. A longstanding challenge faced by Britain’s Islamic banking sector is its ability to ensure its banks have sufficient liquidity due to the limited stock of assets Islamic banks can hold which are both high quality and Shari’ah compliant. Unlike other banks, Islamic banks are currently unable to use these facilities because they involve interest charges on payments, which is not Shari’ah compliant.
A key part of the government’s long term economic plan is making Britain the undisputed centre of global financial services. The UK has already created one of the most attractive regulatory and tax systems for Islamic finance anywhere in the world, and the huge success of the UK’s sovereign bond earlier this year was a significant milestone in the development of the global Islamic finance industry.
Read my full speech here.