Pandemics and climate-related risks produce similarly devastating effects on the real and financial sectors, causing recessions, unemployment and a large depreciation of value across all asset classes. There are many valuable lessons that we can learn from the current pandemic – including of the urgent need to pay more attention to planetary health. Of importance is how we can move closer towards realising Sustainable Development Goals or SDGs. We have a once-in-a-generation opportunity to reset and reprioritise resources to reconstruct our economies and financial systems to be more sustainable and inclusive. This includes tackling climate change, given that climate-related risks pose a growing threat to our very way of life. If left unmanaged, we would be faced with irreversible effects of climate change that would impact us far greater than the pandemic. With so much at stake, the whole country has a part to play in this mission. Even the Bank, where we’ve put the management of climate risk, as a top priority. Government that is agile and forward-looking My final point is on changes to the state’s capacity. In the time of change and modernisation, how we approach the government’s role in innovation must also evolve. Let me be clear. It is not that the government should play no role in the economy, but rather, it might be timely for some new thinking about the role of government in the economy, and how it works with the private sector.

The IFSB has also made significant advancements in taking forward the recommendations made in the Islamic Finance and Global Financial Stability Report 2010 towards achieving financial stability in the national and the international Islamic financial system. The prudential standards including that for liquidity management issued by the IFSB takes into account the unique characteristics of Islamic finance and are also designed to not impose any regulatory burden while upholding the financial stability agenda. The effective implementation of the standards issued by the IFSB is key towards promoting the soundness and stability of Islamic financial institution. To enhance this prospect, the IFSB has strengthened its role in facilitating greater jurisdictional preparedness in the adoption of these standards through the provision of technical assistance to its members. Malaysia is one of the jurisdictions that has adopted and operationalised the prudential standards and the guiding principles that have been issued for the industry. The implementation of these standards and guiding principles support the regulatory framework that we now have in place in our Islamic financial system. As the industry is aware, it places emphasis on the enforcement of standards for capital adequacy, effective risk management practices, liquidity management, greater financial disclosure and governance, reinforced by a strong Shariah and legal framework. Among the important initiatives of the IFSB is also the establishment of the International Islamic Liquidity Management Corporation (IILM) in 2010 which has changed the landscape for liquidity management in the international Islamic financial system, particularly in strengthening the cross-border liquidity arrangements among the Islamic financial institutions.