The holder of a single share would have been liable for the equivalent of four times the salary of a teacher of the time. It is not surprising therefore that within about a decade unlimited liability had all but disappeared from the British banking scene, to be replaced with regimes that limited the liability of shareholders in one way or another.2 I would not propose that we go back to a system of unlimited liability for bank shareholders. But the City of Glasgow Bank episode is interesting because it shows that the public policy challenges of dealing with failing banks are not new. When a bank fails, the money has gone. Someone has to pay for the losses, however. The question is ‘who pays?’ This question has probably be-devilled public policy since banks were invented. ‘Who pays?’ – the past It goes back much further than late Victorian Britain. The Code of Hammurabi – written by the King of Babylon in around 1,800BC – included a provision that if the harvest failed due to adverse weather then the ‘debt-tablet’ would be washed in water and interest on the loan would be cancelled for that year.
Muhammad bin Ibrahim: Sukuk as a viable fund-raising and investment instrument Opening remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the HKMA-BNM Joint Conference on Islamic Finance, Hong Kong, 14 April 2014. *  *  *  Much has been talked about the global financial crisis that had brought about unparalleled financial miseries, economic calamities and social grievances. While the focus has been on financial reforms and economic remedies, the thought on the minds of governments and regulators is how to create a more sustainable global financial landscape. Emphasis on ethics is key to this approach. Greater involvement in ethical-related business has made its strides in contributing towards the overall strength of the global financial system. Ethical investment itself has gained international recognition in recent years. Estimated to be worth more than USD13 trillion, the ethical investment market now represents over a fifth of total assets managed globally. Pension funds, sovereign wealth funds and institutional investors are leading the way. Europe, the United States of America and Canada make up 96% of the share of this market. In Asia, the market is still relatively small – at less than USD100 billion. As ethical investment catches on in Asia, so too has investment in sukuk. Sharing a close affinity, they optimise financial returns while maintaining social good and upholding strong governance. It is my pleasure to be here today at this Joint Conference on Islamic Finance, organised by the Hong Kong Monetary Authority and Bank Negara Malaysia.