“Eager to safeguard the sector’s growth at a time when London is fighting to retain its status as Europe’s financial hub,” TheCityUK — which represents Britain’s banks and financial institutions — is now calling for the government “to make sure legislation is in place so that corporate Sukuk’s [Islamic bonds] can thrive.”
This directive indicates a new, heightened dependence on Islamic banking, a fact that has immense implications for the UK. “Legal risks for Islamic banks….are significant and arise for various reasons”:
First, as most countries have adopted either the common law or civil law framework, their legal systems do not have specific laws/statutes that support the unique features of Islamic financial products. For example, whereas Islamic banks’ main activity is in trading (murabaha) and investing in equities (musharaka and mudaraba), current banking law and regulations in most jurisdictions forbid commercial banks undertaking such activities
What this means is that Islamic banking presents a whole new system of finance. This new system may, and will at times, contradict Western banking norms, which are not based on the Sharia, but instead are intricately intertwined with a global free market system, incorporating global market trends. Islamic banking poses a market risk to the West. Breitbart reported that since February, the demand for “shariah-compliant banking” soared in the UK. And now:
The City’s top lobby group is urging the Government to make sure any laws introduced post-Brexit do not dent demand for Islamic finance as enquiries from banks to set up Shariah-compliant services soar.
The UK is headed for trouble. It already has a two-tier legal system, which has allowed Muslim rape gangs to abuse “white girls” en masse with little attention; it has at least 85 operational sharia courts that are “operating beyond the reach of British law“; and now, it is virtually requesting that Islamic banking rescue Britain due to Brexit.
This bears enormous implications for the West, considering the expansionary nature of Islam. Islamic jurisprudence breaks the world up into two abodes: the abode of War (dar al harb) and the abode of Islam (dar al Islam). The UK has not only compromised its legal system to Sharia norms; it is now poised to surrender its financial banking system as well.
“City urges Government to prioritise Islamic finance ahead of possible Brexit boom by Lucy Burton,” UK Telegraph, September 11, 2017:
The City’s top lobby group is urging the Government to make sure any laws introduced post-Brexit do not dent demand for Islamic finance as enquiries from banks to set up Shariah-compliant services soar.
TheCityUK, which represents Britain’s banks and financial institutions, has sent a 32-page report to the UK Government highlighting that assets of UK firms offering Islamic finance services surpassed $5bn (£3.8bn) in 2016, up 11pc in two years.
Eager to safeguard the sector’s growth at a time when London is fighting to retain its status as Europe’s financial hub, the group is calling on the Government to “make sure legislation is in place so that corporate Sukuk’s [Islamic bonds] can thrive,” said Wayne Evans, the group’s adviser in international strategy.
“We’re looking to keep lobbying, talking to HMG [Her Majesty’s Government], to make sure they are aware of the demand,” Mr Evans told The Telegraph. “Enquiries are certainly going up [but we] need to make sure new legislation being introduced [post-Brexit] doesn’t have an implication on Islamic finance.”
Britain was the first non-Muslim country to sell a bond that can be bought by Islamic investors, drawing over £2bn in bids when it issued the sovereign Sukuk in 2014. At the time, former chancellor George Osborne said promoting the industry, now worth over $2tr, could make Britain “the undisputed centre of the global financial system.”
While the UK’s status as a global financial hub is at risk due to Brexit – London’s lucrative euro-clearing market is under threat and the City is expected to lose as many as 40,000 sales, trading and investment banking jobs – Mr Evan’s said the move could encourage Islamic-compliant investment into the UK, provided new rules don’t end up limiting growth.
“If we see more trade with non-EU countries, and encourage more trade with them, then obviously having expertise and a Sharia-compliant string to your bow has got to be an advantage,” he said. “If the UK financial system is going to be more interested in Malaysia, say, then we have been in the past, then there will be more interest in Islamic finance……