London's City will support Turkey for an era of strong growth

Islamic finance has developed into an important new financial market, with the global Islamic finance sector estimated to have assets worth around $2 trillion, a figure that is expected to grow at around 20 percent a year over the next decade. Over the last few years especially the range of Islamic financial products available in the global market has widened. This has enabled additional funds to be mobilized to promote economic development and growth in both developed and developing economies.

As well as its role in harnessing funding for major projects, as the worldwide market grows, Islamic finance can be used to bring more people into the banking system which supports communities where economic development is needed most.

Although structured to comply with Islamic jurisprudence, Islamic finance products are often utilized by non-Muslims because they meet the specific needs of investors, in particular because they often carry a different risk profile to conventional products.

The financial services sector in London is certainly interested in the growth and possibilities afforded by Islamic finance, partly because we believe that the development of Islamic finance offers great potential to build new international partnerships and grow business in London and overseas. London is the world's leading financial center, and more than 20 international banks operating in the U.K. are working in Islamic finance, and five of these are fully Sharia-compliant. Over twenty law firms with offices in the U.K. are supplying legal services relating to Islamic finance for global and domestic markets.

We are making use of this expertise in London. In 2014, the United Kingdom became the first country outside the Islamic world to issue a sovereign Sukuk, the Islamic equivalent of a bond. The 200 million pounds Sukuk, maturing in 2019, was sold to investors based in the U.K. and in the major hubs for Islamic finance around the world. Allocations were made to a wide range of investors including sovereign wealth funds, central banks and domestic and international financial institutions. In 2015, Emirates Airlines issued a 10-year $913-million Sharia-compliant Sukuk to finance the acquisition of four Airbus A380 aircraft and this was over three times oversubscribed.

Islamic finance mechanisms have been used in a number of projects in London itself, such as The Shard, the Olympic Village, and the redevelopment of the Chelsea Barracks and the Battersea Power Station sites.

The U.K. is also the global leader in Islamic finance education with over 70 institutions offering Islamic finance courses, and 22 universities offering degree programs specializing in Islamic finance. As an educator I firmly believe that these courses will foster the next generation of finance professionals who will cement London's position as the western hub for Islamic finance.

I'm here in Turkey because we in the City believe in the potential for growth in the Islamic finance sector in Istanbul, with both a domestic and regional orientation. We think that this will attract investment and international business to Turkey. It will also help in the wider development of Istanbul as an international financial center, which we strongly support. There are several steps that will help grow the Islamic finance sector in Turkey, including the need for flexible regulation and the development of new financial infrastructure. All these will require strong support and encouragement from the Turkish government and from Turkish financial institutions. I am sure that this support exists. The British financial services sector stands ready to collaborate in any way we can. Our involvement in this week's conference is an indicator of this.

As we start the process of leaving the European Union it is now more important than ever that we deepen our business relationships across the world with valued partners such as Turkey. The United Kingdom has always been a global trading nation, epitomized most strongly by the City of London, the world's leading financial center. Turkey for centuries has been a center of global trade, with east and west meeting in Istanbul as a hub of the Silk Road. I believe that with support from the City's unique cluster of services Turkey can see an era of strong growth that will benefit all Turks. Islamic finance may be the main focus of this visit, but I look forward to seeing Turkey's growth more generally over the years to come.