Government investigates Islamic bonds

Friday, 12 December 2008 07:00

The government is launching an investigation into plans for laws expanding Islamic finance in the UK.

The joint Treasury-FSA consultation will look at alternative finance investment bonds, which include sukuk and Islamic bonds.

The UK currently has over £18 billion worth of Sharia compliant assets, the eighth largest amount in the world - and the only non-Muslim country in the top ten - and the government is aiming to establish and maintain London as "Europe's gateway to international Islamic finance".

London and Birmingham now are now the home to the only standalone Islamic financial institutions in the EU.

Economic secretary to the treasury Ian Pearson said: "The government wants to ensure no one in the UK is denied access to good financial services on account of their religious beliefs.

"We value the contribution Islamic finance makes to London's position as an international financial centre and we want to see this sector continue to grow and prosper in this country."

Under the plans the government is looking to bring in law changes so Islamic bonds are treated and regulated as conventional bonds.

The government has also published a new paper on the development of Islamic finance in the UK aimed at raising awareness of the growing role of Islamic finance and examining the remaining barriers to growth.

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