But what, you might ask, does all this have to do with the UK or the Bank of England, when the centre of gravity for Islamic finance lies in the Middle East, North Africa, South and South East Asia? Well, the fact is that, outside those regions, the UK is the pre-eminent centre for Islamic finance. And that reflects its significant, well-established domestic Muslim population; its strong relationships with the wider Muslim world; and its deep expertise in financial market origination and distribution, embedded in a mature legal and regulatory framework.5 Indeed, Islamic finance in the UK goes back many decades (Table 2): from commodity-based short term liquidity management and trade finance in the 1970s, to the first UK Islamic bank, investment funds and takaful in the early 1980s.6  Defined by the Islamic Financial Services Board as countries where at least 15% of banking assets are (self-declared as) Shari’ah compliant. 4 Islamic financial instruments conferring direct partial ownership of underlying assets. 5 See for instance ‘Challenges and Opportunities for Islamic Banking and Finance in the West: the United Kingdom Experience’ by Rodney Wilson [1999, 2000] 7(1&2) Islamic Economic Studies 35-59; or ‘Islamic Finance in the United Kingdom: Factors Behind its Development and Growth’ by Ahmed Belouafi and Abdelkader Chachi [2014] 22(1) 37-78. 6 Al Barakah International Bank, Dar Al Mal Al Islami, and Takaful UK Ltd respectively.

And recognising we are secular, not religious, regulators, who cannot opine on Shari’ah compliance,9 and equally cannot disapply regulations either.10 To deepen our international engagement further, the Bank of England joined the Islamic Finance Stability Board as an Associate Member in 2015.11 That approach has paid off. Today, the UK is home to four exclusively Islamic banks with assets of over £ more than a dozen conventional banks offering Shari’ah compliant services, a host of investment firms, and a thriving advisory sector. Islamic finance and Covid Of course there have been many challenges over the years – but none perhaps quite as serious as the Covid pandemic. The human cost has been enormous – as has the economic impact,  7  https://www.bankofengland.co.uk/-/media/boe/files/speech/2003/edward-george-islamic-home-financeseminar.pdf?la=en&hash=D2C5BC0A2C057ACCD9A8F40F74A7EBB742FE6C58. 8 https://www.isfin.net/sites/isfin.com/files/islamic_finance_in_the_uk.pdf. 9 This point was made in the judges’ commentary to the 2003/2004 court cases of Beximco and others vs Shamil Bank of Bahrain: http://www.bailii.org/ew/cases/EWCA/Civ/2004/19.html. 10 So, for example, the basis of any assertion that a product is Shari’ah compliant must be communicated to the customer, as must all decision-relevant information, in a way that is clear, fair, and not misleading. 11 https://www.ifsb.org/membership_org.php?org=1. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  particularly in parts of the Muslim world. I know that some worry that Covid might slow the pace of growth in Islamic finance, as economic activity declines, and market participants revert to more conventional tools to meet the daunting financing needs of the crisis.