BMA-LME sign cooperation agreement

The Bahrain Monetary Agency (BMA) and the London Metal Exchange (LME) signed a memorandum of understanding to further advance the fast-growing global Islamic banking industry.

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By  Massoud Derhally Published  July 6, 2003

The Bahrain Monetary Agency (BMA) and the London Metal Exchange (LME) signed a memorandum of understanding to further advance the fast-growing global Islamic banking industry.

Under the terms of the agreement the LME will assist the BMA to develop contracts and documents that could be used by Islamic financial institutions (IFIs) for conducting transactions in the metals also traded on the LME.

Standardisation of such contracts and documents would facilitate trading by IFIs, which manage assets in excess of US$230 billion, of which approximately 80% are invested in commodities.

“The partnership between the BMA and LME will strengthen the global Islamic banking industry, enhance the ability of IFIs to trade in international markets and improve business volumes,” said Shaikh Ahmed.

Islamic banking and finance has, in a relatively short time, emerged as an important force in the international banking arena, with over 250 Islamic financial institutions operating in more than 50 countries and an annual growth rate of 15% that is expected to carry on in the future.

“The agreement is also in line with BMA’s strategic policy to further consolidate Bahrain’s status as the world’s leading centre for Islamic banking and finance,” said Shaikh Ahmed.

As such, BMA has not limited itself to regulation and rigorous supervision of IFIs.

“We continue to respond to the industry’s operational needs by designing instruments and developing markets that are industry-specific,” said Shaikh Ahmed.

“We are delighted to enter into this agreement with the Bahrain Monetary Agency. We want to work closely with the BMA and assist where we can,” said Simon Heale, chief executive of the LME.”

“We are keen to co-operate to help ensure that transactions based around LME metals meet the standards required under Shari’a law,” he added

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