British Prime Minister David Cameron made a bid to position London as a leading hub for Islamic finance on Tuesday, announcing plans for Britain to become the first Western country to issue a sovereign sukuk
, or Islamic bond.
The planned issue, worth around 200 million pounds ($323 million) and expected next year, would be much smaller than an originally planned sukuk
, but would provide a much-needed liquidity management tool for Britain's six Islamic lenders and could encourage local firms to consider issuing sukuk
of their own.
Britain's push to promote itself as a leading Islamic finance hub comes as competition heats up with other financial centers in Asia, led by Malaysia, and in the Middle East.
Britain first announced plans for a sovereign sukuk
five years ago but that issue never materialized as the country's Debt Management Office decided the structure was too expensive.