Islamic banking system study - Essay Example

Britain is a country with an important position in the global market; in accordance with a recent report – based on the data available on the British economy – the British economy is considered to be the ‘the seventh largest economy in the world, with a per capita GDP of $30,900 in 2005’ (Forex Market resources, 2010). The development of the British economy is monitored by the country’s government but also by the Bank of England which ‘was founded in 1694, nationalized in 1946, and gained independence in 1997; the Bank of England is the central bank of the U.K.’ (Forex Market resources, 2010).

The banking market in Britain has a decisive role in the development of the country’s economy – a phenomenon common in all countries internationally. Recently, in 2004, the country’s existing banking system – which can be characterized as Western – has been alternated; the main feature of this change has been the establishment in Britain of the Islamic Bank of Britain, the first bank of this type established in a Western country; the change of the characteristics of the British banking market was completed with the introduction of another bank that is based on the Sharia law, the European Islamic Investment Bank.

Current paper focuses on the examination of the key features of Islamic banking business in Britain; the country’s banking market has been examined and the major competitors of this market are presented; at the next level, the key operational characteristics and the performance of Islamic banks in Britain are identified and critically analyzed. Islamic banking is reviewing and evaluated as a common form of banking in modern Britain – taking into consideration the fact that Islamic banking products are available also by British banks – referring to those banks based on the Western mode of banking.

It is concluded that Islamic banking in Britain has many chances to achieve a further growth but it is necessary that measures are taken