Development of Islamic Finance in Europe

Study of the Implications of Cooperation between the UK and Al Baraka Bahrain in Developing Islamic Banking

  • Henny Saptatia D. Nugrahani Kajian Wilayah Eropa Sekolah Kajian Stratejik dan Global Universitas Indonesia
  • Agung Permadi Kajian Wilayah Eropa Sekolah Kajian Stratejik dan Global Universitas Indonesia
  • Yulinar Amalia Masfufah University of Indonesia
Keywords: Al Baraka, Bahrain, Islamic Banking, Regional Security Complex, United Kingdom

Abstract

This study analyzes the implications of cooperation between United Kingdom (UK) and Bahrain, especially the international financial institution Al-Baraka, in developing Islamic banking. The UK is a non-Middle Eastern country that has developed Islamic finance since the entry of the Al-Baraka international financial institution from Bahrain in 1982. At present, the UK is the centre of Islamic banking in Europe and plays an essential role in the Islamic banking sector. This study analyzes the British policy in opening up the Islamic Bank of Britain (IBB) and the cooperation process with the Al-Baraka financial institution from an international relations perspective. The theory used in this qualitative research is the Regional Security Complex. The concept of amity and enmity in the Regional Security Complex is used to see how this collaboration could be established.  The findings of this study are that the UK is a potential market in the development of Islamic banking in Europe and the cooperation that existed between Britain and Bahrain in the development of Islamic banking occured in the dynamics of amity and enmity. Between the two parties, there was not only friendly relations but also British suspicion of Al-Baraka financial institution which has the potential to become a dominant financial institution and displace conventional financial institutions.

References

Ajagbe, T. S. & Brimah A.N. (2013). Islamic Banking Development and Evolution: Current Issues and Future Prospects. Journal of Research in International Business and Management, [online] 3(2), 73-79. Dalam: http://www.interesjournals.org/JRIBM [diakses 3 Juni 2019].

Al Baraka Islamic Bank. (2019). Annual Financial Statement 2019. [online]. Dalam: https://www.albaraka.bh/getmedia/8e1505d4-a1ab-4ba0-8830-3d8bcc2b4eb8/Signed-ABIB-2019-BD-FS-full.pdf.aspx. [diakses 11 April 2020].

Alharbi, A. (2015). Development of the Islamic Banking System. Journal of Islamic Banking and Finance, [online] 3(1), 12-15. Dalam: http://dx.doi.org/10.15640/jibf.v3n1a2 [diakses 4 Desember 2018].

Ali, M. A. (2015). The Roots and Development of Islamic Banking in the World and in Pakistan. South East Asia Journal of Contemporary Business, Economics, and Law, [online] 7(1):58-63. Dalam: https://seajbel.com/wp-content/uploads/2015/09/KLIBEL7_Acc-33.pdf. [diakses 23 April 2019].

Annual Report Al Baraka Group. (2017). Exploring the Innovative Genius of Islamic Banking to Impact Lives. Islamic Markets, [online]. Dalam: https://islamicmarkets.com/publications/al-baraka-banking-group-annual-report-2017. [diakses 22 November 2019].

Belabes, A. B. (2011). Islamic Finance and the Regulatory Challenge: The European Case. In J. Langton, Islamic Economics and Finance. New York: Palgrave Macmillan.

Bekkin, B. E. (2010). Islamic Finance in the UK. Government of UK, [online]. Dalam: from https://www.gov.uk/ [diakses 4 Januari 2020].

British Embassy Bishkek. (2015). Islamic Finance in the UK. Bishkek. Foreign and Commonwealth Office.

Buzan, B. (2007). People, State and Fear: An Agenda for International Security Studies the Post-Cold War Era. (2nd Edition). Colchester: ECPR Press.

Housby, E. S. (2011). Islamic Financial Services in the United Kingdom. Edinburgh: Edinburgh University Press.

House of Commons Foreign Affairs Committee. (2013). The UK's Relations with Saudi Arabia and Bahrain. London: Fifth Report of Session 2013-14.

Langton J., Trullols C., Turkistani A.Q. (2011) Introduction to Islamic Economics and Finance. In: Langton J., Trullols C., Turkistani A.Q. (eds) Islamic Economics and Finance. IE Business Publishing. Palgrave Macmillan, London. https://doi.org/10.1057/9780230361133_2

Mohammad, M.T., et.al. (2013). The Historical Development of Modern Islamic Banking: A study in South-East Asia Countries. African Journal of Business Management. [online]. Dalam: http://www.academicjournals.org/AJBM [diakses 6 Februari 2020].

Hussain, et.al. (2015). An Overview of Islamic Finance. [online]. Dalam: https://www.imf.org/external/pubs/ft/wp/2015/wp15120.pdf [diakses 8 Juli 2019].

Pew Research Center. (2011). The Future of the Global Muslim Population. [online]. Dalam: Forum on Religion and Public Life. Retrived from https://assets.pewresearch.org/wp-content/uploads/sites/11/2011/01/FutureGlobalMuslimPopulation-WebPDF-Feb10.pdf. [diakses 9 September 2020].

Riaz, U. A. (2014). Perceptions and Experiences of British-Based Muslims on Islamic Banking and Finance in the UK. Thesis for the Doctoral Degree, University of Dundee. [online]. Dalam: https://discovery.dundee.ac.uk/en/studentTheses/perceptions-and-experiences-of-british-based-muslims-on-islamic-b. [diakses 7 April 2019].

Schoon, N. (2008). Islamic Finance: A History. Financial Service Review. [online]. Dalam: www.assaif.org. [diakses 18 April 2019].

TheCityUK. (2015). The UK: Leading Western Centre for Islamic Finance. [online]. Dalam: https://www.thecityuk.com/research/the-uk-leading-western-centre-for-islamic-finance/ [diakses 6 Mei 2019].

Published
2020-12-20
How to Cite
NugrahaniH., PermadiA., & MasfufahY. (2020). Development of Islamic Finance in Europe. Jurnal ICMES, 4(2), 148-170. https://doi.org/10.35748/jurnalicmes.v4i2.95