London, MINA – The Bank of England, the UK’s central bank, announced its support for the Islamic Bank of England for a non-interest-based deposit facility that complies with Sharia requirements, and is the first of a Western central bank to implement this policy.
“This will certainly further strengthen Britain’s role as the leading international financial center for Islamic finance outside of the Muslim world,” said Andrew Hauser, a Bank of England official. Pakistan Observer reported on Friday.
In a British Islamic Finance Week address, Hauser said that key aspects of Islamic finance “make it particularly well suited to funding post-Covid recovery”.
He said these aspects include prioritizing equity risk over debt, considering ethics and the environment into investment decisions, and embracing innovative financial solutions outside of conventional banking.
However, he noted that Islamic banks have long challenges in managing their liquidity efficiently.
He added that the Bank of England’s new non-interest-based central bank deposit facility was “designed to help equalize”.
Islamic finance had assets of $ 2.4 trillion (more than IDR 33,943 trillion) in 2019, 11% higher than the previous year and a third more than 2015. (T/RE1)
Mi’raj News Agency (MINA)