Indeed, from the inception of the Lamfalussy framework we have argued that this innovative institutional approach provides an appropriate basis for achieving the heightened degree of cross-border convergence and cooperation which is required. One of the key advantages of the Lamfalussy approach is the  BIS Review 86/2008  3  combination of a decentralised set-up with cross-border coordination at EU level. A decentralised approach is in line with the national responsibilities for safeguarding financial stability – relating not only to financial regulation and supervision, but also to financial stability monitoring and assessment, crisis management, and deposit insurance – while also allowing for the benefits of geographical proximity and the established experience and knowledge of local authorities to be drawn upon. At the same time, it is clear that the accompanying coordinating mechanisms need to be sufficiently strong, and this has not been the case so far. Therefore, a key priority on the EU financial services policy agenda is the effective and timely implementation of the measures that will allow the full benefits of the Lamfalussy framework to be reaped. Let me now turn to the work underway on enhancing securities clearing and settlement that is underway in Europe. Given the existing fragmentation of the securities market infrastructure the post-trading costs of cross-border securities transactions in the EU are excessively high and this constitutes an important impediment to the enhanced integration of European bond and equity markets.

Government facilitative policies are also an important enabler to accelerate the growth and support the development of the industry. Apart from establishing strong legal and Shariah framework, the Government has also laid down conducive tax legislative that accords tax neutrality treatment for  BIS Review 115/2006  1  Islamic finance transaction. The recent initiative to position Malaysia as an International Islamic Financial Centre, will further spur the business environment thus contribute to create more conducive landscape. This initiative will bring in more players, enhance competition and encourage new diversified products and services, especially in international currencies. This rapid growth and positive performance achieved thus far signifies one of our major accomplishments over the last two decades in Islamic banking and finance. The robust growth of Islamic finance industry today augments the collaborative efforts within the industry to move in tandem to strengthen the position of Islamic finance in Malaysia. As Islamic banking and finance in Malaysia journeys towards global integration and international acceptance, there are key areas in the banking industry that needs to be enhanced to progressively support future development moving forward. Of importance, is the need to effectively engage other stakeholders through various means and approaches including promotional activities and strategies. It is imperative that the approaches adopted to be dynamic and innovative so as to ensure consistency and relevancy with the rapid development of the industry. The KLIIFEX 2006 is well-positioned to be the platform to effectively engage with key stakeholders; i.e. consumers, relevant agencies, scholars and intermediaries.