The regular engagement that is now taking place among the scholars is already producing this convergence. Similarly for the global acceptance of Islamic finance, the harmonisation of standards and practices is important. Full support has to be accorded to the international standard setting organizations such as Islamic Financial Services Board (IFSB) and to the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) to formulate appropriate standards that would strengthen the Islamic financial system. The IFSB has already formulated the prudential treatment for sukuk investment by the Islamic financial institutions as stipulated in the Capital Adequacy Standards. The IFSB has also undertaken initiatives to strengthen the framework and practices in the Islamic money market. Further work is being undertaken to formulate strategies for strengthening the liquidity management framework and to identify measures to develop benchmark Islamic securities that can help to determine benchmark rate for system-wide application. Global co-operation to develop the Islamic financial markets Indeed, while there remains many challenges that need to be overcome, the overall direction and potential of the global Islamic financial markets are certainly well recognised. Greater engagement and interface between the industry, the scholars, and the authorities will create greater awareness, understanding and appreciation of the issues and the direction for its resolution. This will provide an environment in which the full potential of Islamic finance can be realised. This is indeed a global challenge and it will be the cumulative efforts of the scholars, industry and authorities that will produce the best outcome.

Ravi Menon: Singapore’s financial centre in the new landscape Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Investment Management Association of Singapore’s (IMAS) 14th Annual Conference, Singapore, 13 March 2013. *  *  *  Mr Lester Gray, Chairman of IMAS, Distinguished speakers, ladies and gentlemen, good morning. A new financial landscape Four years since Lehman Brothers collapsed, a new financial landscape is emerging. While the contours of this new landscape are still forming, three driving forces are discernible: financial deleveraging, regulatory reforms, and the rise of Asia Driving forces First, the global financial industry is deleveraging. Banks around the world are consolidating their balance sheets and tightening underwriting standards, even forgoing certain types of lending altogether. Many have resorted to shedding assets, especially assets in those countries where the banks do not enjoy a large market share. •  According to BIS data, globally, banks’ foreign claims fell by about 15% from early 2008 to 2012. •  For European banks, the decline was twice as steep, at about 30%. Second, the global financial crisis has spurred financial regulatory reforms on a scale that we have never seen before. •  Basel III will raise the quantity and quality of capital that banks must hold, increase the liquidity buffers they must keep, and limit the amount of leverage they can take on.