Innovating with compliance

As the Islamic finance market moves from the periphery into the mainstream, conventional investment banks are starting to push the boundaries of derivatives-based investments that comply with Sharia Law. By Patrick Fletcher

With the launch of the Islamic Bank of Britain in August of this year, Islamic banking has finally entered the mainstream. The two million or so Muslims in Britain give the bank a solid base of potential customers who have so far been starved of banking opportunities that comply with Sharia Law (Islamic law as laid down in the Koran).

The bank is currently in its infancy, having only one branch – on London’s Edgware Road – and a limited product range. It says its first priority is to build a