By Robin Wigglesworth
This spring, a clutch of politicians, civil service mandarins, bankers and overseas dignitaries gathered in the gilded halls of the UK Foreign Office’s Lancaster House in west London. Unusually for such a gathering, there was not a glass of wine in sight.
For this was a reception designed to celebrate London’s credentials as an aspiring hub for Islamic finance – a niche but fast-growing industry that meshes modern capitalism with Muslim religious principles. The speeches were brief and toasted with glasses of still water and mango juice rather than alcohol from the Foreign Office’s cellars. The reception was interrupted briefly for evening prayers in an adjoining room prepared for the occasion.
The UK government last year announced plans to become the first western country to issue an Islamic bond, or sukuk – a security structured to adhere to the Muslim prohibition on interest. For industry insiders, it was further confirmation that Islamic finance had arrived. [Read more…]