With the intensification of the internationalisation of Islamic finance, it has an increasing role in bridging economies through the mobilisation and channelling of funds to productive investment activities across borders. More than 600 Islamic financial institutions operate in more than 75 countries. The sukuk market is fast becoming an important platform for international fund raising and investment activities that are generating increased cross-border flows. From an outstanding amount of 33 billion US dollars in 2006, the sukuk market has expanded to 180 billion US dollars by the end of 2011, of which 66 percent originated from Asia. There has also been a growing trend for multi-currency sukuk issuances in Asia, attracting global investors to participate in this market. In reinforcing the internationalisation of Islamic finance, global initiatives have been taken to strengthen its institutional and international infrastructure, with emphasis in ensuring financial stability. International prudential standards and best practices have been issued by the Islamic Financial Services Board, which was established in 2002. The industry is also guided by international accounting standards that have been issued by the Accounting and Auditing Organisation for Islamic Financial Institutions, which was established in 1990. The International Islamic Liquidity Management Corporation (IILM), established in 2010, is a further global collaborative effort to enhance liquidity management in the Islamic financial system. Conclusion To fully realise the Asian potential, continuing the transformative momentum of the region will not be complete without ensuring that the benefits of development are widely shared.

Steps have been intensified during this recent decade for greater financial integration. The motivation for greater financial integration is not only to unlock the growth potential of the region, but to achieve more effective and efficient intermediation of funds in the region, particularly by channelling the large surplus funds in the region to productive investments in the region. This would also support regional economic integration. While Asia’s trade with economies outside the region has doubled since 2000, intra-Asia trade has tripled. Now, more than fifty five percent of Asia’s total export is within the region. Intra-regional investment activity has also increased significantly during this decade. It is important to recognise that the approach to a more integrated Asia is different from that adopted by Europe. In the early 2000s, a study undertaken by the ASEAN ten economies concluded that the region did not have the preconditions for a single currency. A different route would therefore be taken to achieve greater integration. For the ASEAN region, it would involve a sequenced liberalisation of the financial sector and capital account, and the development of regional financial markets and financial infrastructure including the regional payments and settlement system. This arrangement also allows for a gradual pace of integration to ensure domestic readiness and the flexibility to take into account the prevailing conditions and stage of development of the participating financial system. Regional collaborative efforts also have been significantly enhanced in the area of crisis management.