Another factor transforming the financial services landscape, and quite closely related to the technological factors I have just mentioned, is the globalisation and consolidation of the main market participants. The last decade has seen a global consolidation of the main intermediaries in the world’s capital markets to leave a relatively small number of large players, with large balance sheets and operations spanning each of the world’s major markets. Since these firms are the major users and, in some cases, owners of the market infrastructure in each country, their interests have a strong influence on market structure. Now I think that big is not always best, and actually smaller niche players have more of a future than is sometimes imagined. But that said, in twenty years I think that it is quite possible that the financial world will be dominated by perhaps twenty truly international wholesale banks, including a few genuinely pan-European ones. Now it is possible that these large banks will want to use their own balance sheets to offer a full range of services to their customers, so that they rather than an exchange-based central market become the focus for liquidity. If so, such firms would be in competition with infrastructure providers: for example, when offering in-house trading or custody services to their clients. On the other hand, such firms will also want to continue to trade with each other, in order to manage their own risks and inventory.

This landmark collaboration between 12 central banks and two multilateral development institutions represents a major breakthrough in strengthening the liquidity arrangements for the international Islamic financial system. This liquidity infrastructure is vital for the efficient and well-functioning of the Islamic financial system. The creation of IILM with the mandate to issue Shariah compliant liquid instruments is an important step forward in promoting more efficient cross-border liquidity management by Islamic financial institutions. The IILM will also be well-equipped to serve as a platform of global engagement on liquidity management in the Islamic financial system and on addressing cross-border systemic liquidity issues. Conclusion Let me conclude my remarks. This decade has been a defining era in the evolution of Islamic finance. It has been characterized by rapid global expansion and increased internationalisation. Of importance is that these trends have been supported by significant actions taken to strengthen the foundations of the international Islamic financial system involving the development of important international institutional arrangements and mechanisms. These tremendous achievements have been the outcome of strong cooperation and collaboration among the Central Banking community from both Islamic and non-Islamic countries. Moving forward, it is essential for this strong cooperation to continue given the dynamic nature of the industry. In addition, the pace of internationalization can be expected to gain further momentum. As the international integration of Islamic finance intensifies, cross border financial flows and its associated challenges will also increase. This will call for an even greater degree of international cooperation and coordination.