February 2016

The Bank of England is considering establishing deposit and liquidity insurance facilities that comply with Shariah law, noting that the global Islamic finance sector has grown to roughly $2 trillion and lacks access to banking tools because of the prohibition of interest and belief that money should serve only as a medium of exchange, among other things. The BOE has identified two potential models for a Shariah-compliant central-bank deposit facility. A wakalah fund-based model would involve the establishment...