Bank Negara Malaysia has received positive response from the local and foreign financial institutions to participate in the MIFC, particularly in the establishment of International Islamic Banks (IIBs), International Takaful Operators (ITOs), as well as International Currency Business Units (ICBUs) of Islamic banks and takaful operators. To date, 14 financial institutions have been granted approval to set up ICBUs. IV. Critical areas of contribution – Malaysia's role  In this last segment of my address this morning, allow me to share several key areas in Islamic finance where Malaysia can play major roles, particularly by capitalizing on various initiatives and incentives under MIFC banner. The first area is retakaful. The Malaysian Government has focused efforts towards the development of the retakaful sector in complementing the encouraging growth and expansion of the takaful industry. This is a critical response to the challenge of the shortage of strong and credible retakaful capacity globally which poses an impediment to the growth momentum of the takaful sector. Besides fulfilling the need for retakaful support from the takaful operators, and reducing the industry's dependency on conventional reinsurance support, the retakaful operators will also play key roles in enhancing the technical knowledge in the market, as well as in promoting product development and innovation in the takaful industry. For this, Bank Negara Malaysia has taken a strategic move to further strengthen Malaysia's edge as a retakaful hub by inviting strong and qualified applicants, both local and foreign, to make Malaysia as their platform for retakaful activities.

The optimal way to reduce the ratio of the deficit to GDP is through economic growth. In turn, faster growth calls for improvements in productivity. In this respect, there needs to be a greater degree of public awareness of the importance of productivity and competitiveness, and a consensus on steps that can be taken with minimal social disruption to enhance the country’s international competitiveness. 5  Thomas F. Huertas, Crisis Cause, Containment and Cure, 2e, Palgrave Macmillan, 2010. 6  Andrew W. Lo, “Reading about the financial crisis: A twenty-one-book review” Journal of Economic Literature 2012, 50:1, pp. 151–178. 7  6  Stefan Walter, “Basel III: Stronger Banks and a More Resilient Financial System”, Financial Stability Institute, 6 April 2011. BIS central bankers’ speeches  As you know, competitiveness depends on the relationship between changes in productivity and changes in costs, including wages. I have to note that unit labour costs (ULC), which are based on the relationship between compensation and productivity, have generally moved in line with those in the euro area. However, in recent quarters, Malta’s unit labour costs have pulled ahead of those in the euro area, as shown in Chart 6. In this respect, the wage setting process and efficient labour market practices are of critical importance. The fact that collective agreements in Malta are negotiated at the level of the individual firm helps to ensure that wage growth is compatible with the realities of the markets where the firm sells its products.