This, in turn, strengthens the financial sector’s resilience during periods of distress. I am convinced that when banking systems are adequately capitalised and well-managed, and risks are correctly assessed within the appropriate time horizon, the financial system becomes more stable, less procyclical, more resilient during periods of distress and therefore better able to promote sustainable growth. In the light of our mutual interests, I am especially pleased to share with you some thoughts on the landmark efforts under way to revise the Basel Capital Accord. The Basel Committee embarked on this undertaking to promote the responsible pursuit of risk and rewards across the banking sector and, hence, to promote greater financial stability. This reform builds on trends in many countries to incorporate incentives into the regulatory framework encouraging banks to identify and understand the risks they face today, to consider what risks may arise tomorrow, and to respond actively and appropriately to both. As you know, this has not been an easy task for supervisors or for bankers. Yet we have achieved considerable goals over the past four to five years, and I would like to begin with a brief look back to recall why bankers and supervisors decided that a New Basel Accord was needed. Then, I’d like to share with you the latest news on consultations with the industry and the Committee’s most recent decisions on the way forward to finalise, and then to implement, the new rules.

There have also been notable achievements in the area of talent development with the proliferation of programmes and certifications which have focussed on Islamic finance offered by several major institutions of higher learning, professional entities, training agencies and industry groups around the world. More recently, platforms for greater engagement among practitioners, scholars and regulators have further added to international collaboration in Islamic finance. And finally, the evolution of Islamic finance in this decade has been marked by its international dimension in which it is becoming an increasingly important part of the global financial landscape. The development of Islamic finance in emerging economies also reflects the changing global pattern of financial and economic integration. This is taking place with the strengthening of financial and economic linkages between Asia and the Middle East and the increased activity of Islamic finance beyond the traditional Muslim countries including the more established financial centres. Cross-border transactions are growing as more issuers  BIS Review 64/2010  1  consider Islamic finance as an attractive alternative means for raising capital, whilst investors are also increasingly considering it as a new asset class in their investment universe. This internationalisation and sustained global expansion of Islamic finance has taken place despite the more challenging environment presented by the global financial crisis, demonstrating the resilience of Islamic finance as a stable form of financial intermediation. Global financial regulatory reforms Ladies and gentlemen, Much has been said and written about the causes of the global financial crisis.