A key moment, which some of you will recall first-hand, came in 2003 when our then Governor, the late Sir Edward George, delivered a speech in which he talked about being touched by the plight of Muslim neighbours who had had to use a conventional interest-bearing mortgage to purchase their home, reluctantly and against their principles. He reflected on how sad and unnecessary this seemed, given the UK financial system’s capacity for innovation in meeting the needs of different parts of society.7 To put that right, the Bank asked a senior working group drawn from the public and the private sectors to identify the changes needed to legal, tax and regulatory arrangements. Those changes formed the foundations of the system we have today. They were subsequently reinforced by a 2007 FSA paper articulating how Islamic finance could be fairly and consistently supervised within a secular regulatory framework.8 Thirteen years later, one of the co-authors of that paper – Arshadur (‘Ash’) Rahman, known to many attending Islamic Finance Week – is the driving force behind our new facility. The regulatory approach set out by Ash and his co-authors still applies today. A preference for principles over excessively rigid rules, able to respond to diverse and evolving markets, and reduce the scope for regulatory arbitrage. Avoiding unnecessary regulatory obstacles to Islamic finance, while giving no special favours.
Mervyn King: Through the looking glass – reform of the international institutions Text of the Inaugural International Distinguished Lecture by Mr Mervyn King, Governor of the Bank of England, to the Melbourne Centre for Financial Studies, Melbourne, 21 December 2006. * 1. *  *  What does globalisation mean? Humpty Dumpty said to Alice, “When I use a word, it means just what I choose it to mean – neither more nor less”. So let me explain first what I mean by “globalisation”. In his excellent book Why Globalization Works, Martin Wolf remarks, “Globalization is a hideous word of obscure meaning, coined in the 1960s, that came into ever-greater vogue in the 1990s”. I think of globalisation as a process of increasing international economic integration accompanied by political agreement on the rules of the game which govern that process. The rise of China and India as trading powers is an example of increasing integration. And the accession of China into the World Trade Organisation is an example of the application of the rules of the game. Globalisation is the driving force of many of the most significant changes in our economies. But it is far from a new phenomenon – it is as old as the human race itself. The European settlement of Australia represented the globalising forces of migration and capital flows over several centuries. To me one of the most poignant symbols of globalisation is the Australian War Memorial at Hyde Park Corner in London.