February 2009 Islamic finance has proven to be more resilience to the world's economic crisis as London consolidates its position as a key western center, according to a financial services organization. In a new report, the International Financial Services London (IFSL) found that Islamic banks had been "less affected than many conventional banks as they are prohibited from activities that have contributed to the credit crunch, such as investment in toxic assets and dependence on wholesale funds". According to IRNA, while Islamic finance had felt the influence of the credit crunch and the world's economic downturn last year, IFSL noted that the global market for Islamic financial services rose by 37 percent to $729 billion at the end of 2007. "The UK has benefited considerably from supportive government policies intended to put Islamic services on the same footing as conventional services," said Duncan McKenzie, IFSL's Director of Economics. "Evidence of London's growing role in Islamic finance is shown in the UK being the only western country to feature prominently, 8th with assets of $18 billion, in a global ranking of Sharia-compliant assets by country." The report said London has been consolidating its position as the key western center for Islamic finance in 2008. This included a cumulative total of 18 Sukuk issues with $10 billion being listed on the London Stock Exchange, second only to Dubai. During the year, Gatehouse Bank and European Finance House have been granted licences bringing to five the number of fully Sharia-compliant banks in the UK. "It is important we continue to work with our Islamic finance partners to maintain our position as the leading western center for Islamic finance service providers," said Sir Andrew Cahn, UK Trade and Investment's chief executive officer. "Despite its origins overseas, Islamic finance has found a natural home in the UK. Though no sector is immune to the global financial crisis, Islamic finance has shown great resilience." IFSL's report indicated that the UK's offering includes a total of 22 banks with Sharia-compliant products, far more than in any other western country. Professional services are also provided by 18 law firms and the big accounting firms. With 55 institutions offering educational and training products in Islamic finance, the UK has more providers than any other country worldwide, it said. IFSL is an independent organization that seeks to promote and raise the awareness of the UK's role in international financial markets and to highlight the contribution of financial services to the UK economy.
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