This includes the visit of King Abdullah of Saudi Arabia to four Asian countries in 2006 and several meetings between King Abdullah II of Jordan and Singapore’s President and Prime Minister, to name just a few. I am happy that frequent dialogue and cooperation are taking place at all levels, via platforms such as the Asia-Middle East Dialogues or AMED. AMED was first held in 2005 in Singapore, and Egypt recently hosted the 2008 meeting. The 2008 meeting involved a total of about 50 countries from the Middle East and Asia. I am also happy to see strong cooperation in training. The Islamic Development Bank’s IRTI 3 , Bahrain’s BIBF 4 and Malaysia’s INCEIF 5 are Islamic finance-focused training institutes which provide very good training in this area. Such training programmes, besides imparting knowledge, enable people to know each other better, and provide the basis for future cooperation. Conclusion To conclude, let me summarise. There are three essential tasks we face in promoting greater integration of Islamic financial markets. The first is to encourage greater economic integration and increased cross border flow of trade and investments. Economic integration drives financial integration and vice versa. The second task is to foster appropriate legal, regulatory and supervisory frameworks that effectively cater for the specificities of the Islamic services providers; and to work towards greater convergence of rules and practices in Islamic Finance. This requires greater trust and stronger ties among supervisors. The third is to cultivate stronger people-to-people bonds across all levels, through training, conference and dialogues.

These topics, as I understand, will be discussed this afternoon under the two scheduled working group sessions. To broaden the geographical reach of the large pool of useful reference documents on IRB-related issues produced for its meetings or contributed by the member jurisdictions, the AIGV has developed an electronic library on eBIS to store these documents for access by the supervisory community. The hosting of this event is well timed, as some jurisdictions have already entered into the implementation phase of the Basel II IRB framework and other jurisdictions, including many from Asia, are in the pipeline for the introduction of the framework for adoption by their banks. The event is therefore a good opportunity for representatives of jurisdictions which have yet to adopt Basel II to hear from jurisdictions already implementing the framework about the emerging issues, and to facilitate future communications on this topic among participants. As Chairman of the EMEAP Working Group on Banking Supervision, the HKMA certainly welcomes the opportunity to host this outreach event, and would like to thank the AIGV members who have stayed behind after the regular meeting to provide support. A major innovation of Basel II is that it allows banks to calculate their regulatory capital requirements using the output of their internal rating systems, subject to supervisory approval. Under the IRB Approach, banks employ internal rating systems to produce estimates of one or more risk components, which are then used as the key inputs to the calculation of regulatory capital requirements for credit risk.