Our experiences include provision of advisory services to Shariah funds and asset management companies in the U.S, Switzerland and South Korea; and to sovereigns and corporates on sukuk issuances. Our legal firms have also played a part in the development of legal and regulatory frameworks for Islamic finance in a number of countries. Contributions have also been made in the area of research, education and training, with more than 50 international projects, training and customised programmes delivered to international clients since 2010. The third imperative is in the area of talent. The success of an Islamic finance system depends critically on having the right set of quality talent. This is more so as we aspire for Islamic finance to reach greater heights, in this new normal of rapid advances in technology and changing demographics. Accordingly, Malaysia has made significant investments in developing a complete ecosystem dedicated to meeting the human capital needs of the Islamic finance industry. Our talent infrastructure caters to every level, for both academic and professional needs. Dedicated talent entities for Islamic finance have also been set up, such as INCEIF – a global university for Islamic finance – and ISRA, a globally recognised institution in enriching research and knowledge on Shariah. An important aspect of talent development is elevating the quality and professionalism of talents in Islamic finance – not just in Malaysia, but globally. In realising this vision, the Chartered Institute of Islamic Finance Professionals was set up to promote the highest standards of professional practice among Islamic finance practitioners.

The buffer rate will be increased when financial imbalances are building up or have built up, thus bolstering resilience when we need it most. The countercyclical capital buffer can thereby have an impact on both the probability and the costs of a crisis. The buffer may thus also reduce fluctuations in the economy. We are now in a phase where banks are facing a number of new capital requirements. Banks can choose to adapt to the higher capital requirements by, for example, increasing lending margins or by tightening lending. Thus, higher capital requirements could curb economic activity in the short term. As the new requirements are phased in, the buffer will have to be adjusted to the economic situation and other requirements applying to banks. This does not mean that the countercyclical capital buffer should be changed frequently in pace with normal cyclical fluctuations. Once the buffer has been built up, the costs of maintaining capital levels will probably be low. The buffer rate should not be reduced automatically even if there are signs that financial imbalances are receding. This is in line with the international guidelines for the countercyclical buffer. The countercyclical capital buffer is only one of the elements in the new international regulatory framework for banks. The European Systemic Risk Board (ESRB) provides, among other things, for sector-specific capital requirements and limits on loan-to-income and loan-to-value ratios. 3 In New Zealand, the authorities have introduced limits on banks’ share of high LVR residential mortgage lending.