The IFSB now has 137 members that include 35 regulatory and supervisory authorities, five international inter-government organisations including the BIS, World Bank and the IMF, and 97 market players and professional firms from 22 jurisdictions. Of significance to note is that the membership of the IFSB comprises several authorities and international institutions from the non-Muslim countries. The IFSB complements the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) which was established earlier in 1991, to set the accounting standards to ensure that the true and fair value are reflected in the financial transactions and to ensure greater accountability and responsibility of the financial institutions. Finally, these developments have been reinforced by greater liberalisation to increase the international dimension of Islamic finance. With increased international participation in Islamic financial markets, it has prompted increased cross-border Islamic financial flows. In addition, Islamic financial institutions that had previously operated only in their own domestic jurisdictions have begun to venture abroad to tap new growth opportunities in other regions. This new international dimension of Islamic finance has enhanced further the international inter-linkages in this more globalised environment. Islamic finance: operating in a challenging and evolving environment The evolution and expansion of Islamic finance has occurred in a fast changing and dynamic international environment. In the context of a more challenging and competitive environment, the issue of financial stability, viability and competitiveness are paramount. This is particularly evident in the recent developments experienced in the international financial system.

Jean-Pierre Danthine: The Swiss National Bank’s 2012 Financial Stability Report Speech by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 14 June 2012. *  *  *  Introductory remarks by Jean-Pierre Danthine I, too, would like to welcome you to this news conference, which for me is also the occasion to present the 2012 edition of the Swiss National Bank’s Financial Stability Report. The report contains the SNB’s assessment of the risks to the stability of the Swiss banking system, and of the need for action. This promotes risk awareness among Swiss banking sector agents, thereby contributing to financial stability. Introduction Economic and financial conditions for the Swiss banking sector have deteriorated since the last Financial Stability Report. The sovereign debt crisis escalated, threatening to spill over from peripheral euro area countries to the core countries of the euro area. In addition, global economic growth lost momentum and tensions grew in the international banking system. There was, likewise, no easing of tension on the Swiss mortgage and real estate markets. The momentum observed in real estate prices and mortgages continued. As my colleague, Thomas Jordan, has already mentioned, under its baseline scenario the SNB expects a gradual improvement in economic and financial conditions over the next 12 months. Although this is considered to be the most likely scenario, the risk of a renewed deterioration in the environment remains high.