It is important that bankers including board members remain current on all these developments and understand their implications on our domestic and regional financial landscape. In the insurance and takaful industry, there have been continued improvements in corporate governance practices and further strengthening of the capital positions of individual institutions. These improvements have however, been uneven between institutions and overall progress can be further accelerated. We will monitor closely the implementation plans by insurers to meet and maintain internal capital targets that are above the regulatory minimum level. Given the increasingly more complex and competitive environment going forward, smaller insurers, particularly in the general insurance industry, need to strengthen their ability to comply with the higher prudential standards. The option for mergers to form stronger and more resilient institutions would accelerate this process. In the critical area of corporate governance, we are well advanced in our concerted efforts to strengthen the Boards of Financial Institutions through the Financial Institutions Directors’ Education (FIDE) programme which is now managed by the ICLIF Leadership and Governance Centre. More than 200 directors have completed the programme. Bank Negara Malaysia is also reviewing the need for boards of insurance companies to be served by a dedicated head of risk to provide assurance to the board on the quality of risk management within the firm. This is to promote better risk management systems and  BIS Review 146/2010  5  processes among insurers and a more integrated approach to risk management and oversight within insurers.

With greater regional integration, we also see significant potential to leverage domestic strategies to create a strong regional footprint in the provision of affordable and commercially viable financial products and services. Beyond domestic borders, Asia’s continued growth and prosperity offers significant opportunities for the provision of financial services and productive investment prospects. An important thrust of the blueprint will therefore be to develop the financial infrastructure to enhance the linkages within the region. This will be facilitated through the continued process of financial integration and increased connectivity within the region, with greater liberalisation of the financial sector, the integration of payment and settlement systems, and greater crossborder cooperation in maintaining regional financial stability. Central to the development strategies for the next decade is the consolidation of Malaysia’s position as a leading international Islamic financial centre. Malaysia already has a strong brand affirmed by the growing importance of our sukuk market and the higher level of foreign participation in our Islamic financial markets. This is reinforced by the diversity of market players and a comprehensive institutional framework for Islamic finance. Two landmark initiatives achieved this year is the establishment of the Islamic Financial Stability Forum (IFSF) and the International Islamic Liquidity Management Corporation (IILM). Moving forward, Islamic finance is expected to further accelerate its pace of global expansion, having a more significant role in facilitating the intermediation of international financial flows. A critical factor that will determine the success of the financial services industry is the talents in the industry.