Timely collaboration between Malaysia and Bahrain to strengthen interlinkages The collaborative effort we are witnessing today is expected to strengthen the liquidity management framework between Malaysia and Bahrain, thereby enhancing the financial interlinkages between the two countries. Bursa Suq Al Sila’ is a purposefully designed  BIS Review 8/2010  1  exchanged-traded platform to facilitate commodity murabahah transactions. It is the first internet based platform in the world with crude palm oil (CPO) as its underlying base commodity. The establishment of Bursa Suq Al Sila’ in August 2009 is a collaborative initiative of the Central Bank of Malaysia, the Securities Commission, Bursa Malaysia and the market players that was conceptualised some three years ago. Bursa Suq Al-Sila’ will provide a viable alternative to the well functioning of liquidity management in Islamic financial system. The platform will provide another dimension to the liquidity management infrastructure of the Islamic banking industry; thus providing market players with greater tools to manage their assets and liabilities. It is expected to unlock a vast potential of opportunities for the Islamic financial industry by providing a wider range of new instruments. Not only can it be used for liquidity management and risk management purposes but players can derive additional linkages by utilising the platform to facilitate the creation of financing and deposit products. It creates a more transparent and streamlined commodity transaction practices based on the concept of murabahah or tawarruq.

Mohd Razif bin Abd Kadir: Islamic finance and the collaboration between Malaysia and Bahrain Special remarks by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the Signing Ceremony of Memorandum of Understanding between Bursa Malaysia – Bahrain Financial Exchange, Manama, 24 January 2010. *  *  *  It is my great pleasure to be here today on this occasion of the signing ceremony of the Memorandum of Understanding between Bursa Malaysia Berhad and the Bahrain Financial Exchange. The signing we are about to witness today will lay the foundation for the collaboration by the two exchanges on Bursa Suq Al-Sila’. I wish to thank the two exchanges for inviting me to give some remarks at this auspicious occasion. I also wish to applaud this commendable effort by the two exchanges which marks another important milestone in the development of the global Islamic financial services industry and in bridging further our two countries. Maintaining the stability of Islamic financial system This effort takes place at a time when the global economy is entering into a period of improved international economic and financial conditions. The global financial crisis has highlighted several structural weaknesses and drawbacks in the international financial system. While Islamic finance is not insulated from the effects of the current environment, the Shariah principles and values that are inherent in Islamic finance provide an important underlying foundation. The Islamic financial system has continued, during this period, to become increasingly integrated with the international financial system.