A landmark two-day conference opened in London today to discuss the potential and opportunities presented by Islamic and ethical finance in the current financial crisis.

The Islamic Finance and Trade Conference, the second organized by the Muslim Council of Britain (MCB), bring together key investors and industry figures amid a looming global recession in the face of a credit crunch and adverse developments in financial markets.

"As the current financial crisis threatens to usher in a global recession, there is a growing recognition of the need to explore more robust forms of financial intermediation," said MCB secretary general Abdul Bari.

"Islamic finance, with its emphasis on asset backed transactions, offers one such prospect. The time is opportune for the UK to investigate how Islamic finance can contribute towards overcoming the many challenges posed by the current credit crunch," Bari said.

Speakers at the conference include Justice Secretary Jack Straw, Financial Secretary at the Treasury Stephen Timms and Communities and Local Government Minister Sadiq Khan.

Issues being considered is whether the underlining principals of Islamic Finance have the potential to contribute to a more stable economy.

Opportunities are also being examined of utilizing Islamic financial models, like Sukuk bonds, as a catalyst as a model of regeneration and development due to the momentum of London staging the 2012 Olympic Games and being replicated in other inner cities.

The first international conference was launched in 2006 with the support of the Organization of the Islamic Conference (OIC) and the Islamic Development Bank and included Gordon Brown as the principal speaker, when he was Britain's chancellor of the exchequer.

The initial aim was to showcase the UK as the gateway for trade with Muslim Countries and to promote London as a key center for Islamic finance.

The City of London has been at the forefront of many developments in Shariaah-compliant financial products and continues to account for a substantial part of the wholesale Islamic finance syndication market.

According to Standard and Poor's rating agency, the Islamic Finance industry controls a massive 2.5 trillion pounds ($ 4 trillion) in assets and continues to grow at the recession beating rate of around 15 percent annually.