Over the last 10 years, for example there has been a striking swing in employment with rapid growth during the dotcom boom followed by a sharp fall and subsequent recovery (Chart 5). 3  The UK is a net exporter of financial services, running a surplus in 2006 of £ billion (or 2% of GDP) on financial services and insurance. North Sea oil production peaked in 1999, and in 2006 was nearly 40% below this peak. 2  BIS Review 73/2007  That reflects a strong cycle in financial sector profits (Chart 6) which is an international phenomenon – indeed, in the last 10 years major European financial firms and US securities dealers saw an even bigger cycle in their profitability than major UK financial firms (Chart 7). The same is true for earnings (Chart 8). This reflects the importance of bonuses which account for around 20% of remuneration in the financial sector compared with around 5% across the economy as a whole. The figures in the City itself can be considerably higher. A figure of 50% is common in investment banking, in which a rough rule of thumb is that firms distribute about half their pre bonus profits to staff. It is estimated that 4200 workers in the City received bonuses worth more than £ in 2006/07. Of course the growth in those bonuses is contributing to the widening inequality of incomes at the top of the earnings distribution.
The IILM is expected to issue high quality, liquid, tradable and low risk Shari’ah-compliant financial instruments at both the national level and across borders to enhance the soundness and stability of the Islamic financial markets. The instruments of the IILM will be utilized in liquidity management as eligible collateral for interbank transactions and central bank financing, or through trading of IILM instruments (either within the same country or crossborder) in the secondary market. As the IILM is intended to facilitate cross-border liquidity management, its instruments shall be denominated in major reserve currencies. This is to ensure access to a large pool of global investors and broaden the range of its holders, thereby enhancing the prospects for active secondary market. There is not an available mechanism through which the Central Bank of Turkey can provide liquidity to the interest-free banking sector, or the so-called participation banks. However, the Central Bank of Turkey has become a founding member of the IILM and contributed 10 million USD to its equity. As additional efforts by the institutions in Turkey to facilitate participation banks’ liquidity management, the Undersecretariat of Treasury has started the issuance of Revenue Indexed Bonds, which are purchased by the participation banks. As it is known, another kind of interest-free security, which could be useful for participation banks especially in their liquidity management, is a specially designed financial certificate, called “Sukuk”.