Zeti Akhtar Aziz: Fostering linkages in Islamic finance
Opening remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Global
Islamic Finance Forum 2007: "Fostering Linkages in Islamic Finance", Kuala Lumpur, 27 March 2007.
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Bismillahir Rahmanir Rahim
Yang Amat Berhormat Dato' Seri Abdullah Badawi,
Honourable Prime Minister of Malaysia
Your Excellencies,
Distinguished Guests,
Ladies and Gentlemen,
It is my very great pleasure and honour to welcome you to this Global Islamic Finance Forum (GIFF)
2007, hosted by Bank Negara Malaysia in conjunction with the Islamic Financial Services Board
(IFSB) Annual Meetings and Seminars. Allow me to first express my gratitude to the Honourable Prime
Minister of Malaysia, Yang Amat Berhormat Dato' Seri Abdullah Ahmad Badawi, for graciously
accepting to be with us this afternoon to deliver the keynote address and to officiate this important
forum.
The significant gathering at this forum, with the theme fostering Greater Linkages in Islamic Finance',
is a manifestation of the increasing interest towards evolving the international dimension of Islamic
finance. Indeed, building stronger alliances and greater intermediation inter-linkages forms part of the
endeavor to facilitate greater international trade and investment flows.
The Islamic financial system, comprising the financial institutions, the markets and the financial
infrastructure, has demonstrated its viability and robustness as a form of financial intermediation. Its
growing role in mobilising and channeling the funds to productive investment activities across borders
brings two significant benefits to the global economy. Firstly, it enhances the potential for higher global
growth, while also contributing towards some rebalancing of the global growth.
Secondly, the strengthened international financial linkages allows for greater potential for the
diversification of risks. The increase in the Islamic financial products, the growing number of assets
classes being offered, the increased cross ownership of assets all have expanded the possibilities for
greater diversification of risks and the potential for return.
Today, Islamic finance represents a multi-billion dollar industry which has a presence in many
countries and more recently, there has been widening participation by established financial centres.
There are now more than 200 Islamic financial institutions, some of which are global players, offering
an extensive range of Shariah compliant products and services to a broad spectrum of consumers and
businesses that transcends beyond the Muslim world.
This global forum has aimed to bring together the industry practitioners, issuers and investors, the
regulators, scholars as well as those in related services, including the IT services, legal, accounting
and auditing professionals and those in human resource development. It is our hope that the
deliberations today will play a catalytic role in building greater collective efforts through
multistakeholder dialogues and network-building activities whilst discovering opportunities and also
improving our understanding on important areas in Islamic finance.
Ladies and Gentlemen,
As we know today, there are already clusters of cross-border collaborative activities taking place on
several fronts that serve to contribute towards increasing the international integration process of
Islamic finance. These activities have taken many forms ranging from equity and non-equity business
collaboration, regulatory cooperation in setting the global development blueprint, information exchange
and building consensus on issues for international prudential standards development, to
intergovernmental memorandums of understanding for collaborative developmental initiatives in Islamic
finance, and many others.
Ladies and Gentlemen,
As Islamic finance continues to make significant inroads in the international financial markets with
expanding scale, growing magnitude and greater sophistication, a critical need emerges for an
expanded discourse on the developments and emerging issues with its global relevance and impact,
of interest to all its major stakeholders. This is the first time that Bank Negara Malaysia has organized
a full-scale, multi-disciplinary, international event of this nature on Islamic finance. These sessions
include the annual Investors & Issuers Forum, and Financial Regulators Forum and the biannual
Banking and Financial Law School. It is our hope that participants will benefit from any of the parallel
sessions of their interests and have increased opportunities for network building among the widening
groups of stakeholders participation in the Forum. These forums have been designed to provide
dynamic and interactive formats to encouraging open and inclusive dialogues that foster a greater
collective understanding in Islamic finance.
Let me record our appreciation to the many distinguished speakers from various international
institutions, financial practitioners, legal fraternity, regulatory bodies and other prominent thought
leaders in Islamic finance. It is our sincere hope that this global forum will be rewarding and may the
collective wisdom derived from the deliberations lead to more collective actions that will be to our
increased mutual benefits.
Let me once again express our appreciation to Yang Amat Berhormat Dato' Seri Abdullah Badawi for
his presence here this afternoon and for accepting to deliver the keynote address at our Forum today.
Thank you.