To sustain this trend, further in-depth applied research is needed to develop more financial products that create closer links between Islamic finance and real economic activity, in terms of its operating models, risk management and supporting infrastructure. This includes more innovative risk sharing products and to evolve from the common structures of Islamic financial products to the more unique structures with greater growth opportunities. This trend is already apparent in the sukuk market. There has been the issuance of several new and innovative structures in this segment, with unique underlying features that has drawn significant global attention. This includes the recent issuance of the first Renminbi (RMB) 1 billion sukuk with airtime vouchers as its underlying assets and the debut issuance of a “green” sukuk by France. Another high-potential segment is the Islamic fund industry. Its recent growth momentum has spanned more than 36 countries, including markets that are relatively new to Islamic finance, such as Australia and Ireland. The second imperative is for the outreach of Islamic finance to be inclusive and to be accessible to all, particularly the lower income groups and small businesses. An important agenda in the global economy is to achieve a more balanced growth with reduced income disparities. Financial services has a tremendous role in contributing towards a more equitable economic growth and a more sustainable development. In relation to this, Islamic financial institutions need to strive to enhance the access of their financial services to all segments of society.

Zeti Akhtar Aziz: Islamic finance in a challenging economy – moving forward Opening address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 2nd International Shari’ah Research Academy for Islamic Finance (ISRA) Colloquium 2012 “Islamic finance in a challenging economy – moving forward”, Kuala Lumpur, 27 November 2012. *  *  *  Islamic finance has experienced its most rapid pace of development and growth in this decade, signifying its dynamism and resilience as a form of financial intermediation. This has taken place in a highly challenging international financial and economic environment. It is estimated that the global Islamic finance industry will remain on this growth trajectory, with the continued expansion of Islamic financial institutions, including in new jurisdictions, and with the growing significance of financial markets in the Islamic financial system. Increased liberalisation and greater foreign participation in the Islamic financial markets are reinforcing this trend and resulting in increased cross border financial flows. This is contributing to increased international financial and economic linkages between nations, particularly among emerging economies. During the recent global financial crisis and its aftermath, the international financial system has experienced a series of unprecedented financial meltdowns and disruptions. During this period, the Islamic financial industry has generally weathered these challenging financial and economic conditions. In relation to this, Islamic finance highlights the importance of basic banking and the need to have a clear separation from higher risk-taking activities.