Pursuant to authority delegated by the Board of Governors, the New York Fed plays a significant role in the supervision of some of the largest financial institutions in the United States and most of the foreign banks that do business in the United States. Supervision means the monitoring, inspecting, and examining of financial institutions to ensure that they comply with rules and regulations, and that they operate in a safe and sound manner. Supervision of financial institutions is tailored based on the size and complexity of the institution. The New York Fed also participates in much of the Federal Reserve’s work in the international arena. We manage the foreign reserves of the Federal Reserve System and the United States Treasury. We offer deposit and custody accounts, and provide related services, to foreign official institutions, including other central banks. And we maintain a current understanding of foreign markets and laws. Our analysis helps us to carry out our responsibilities and to assess the risks posed by an increasingly interconnected global financial system. Risk in banking Now that you have some idea of what the New York Fed does, I will share some thoughts on the roles of risk in banking. For starters, and to state the obvious, risk is inherent in banking. Economic growth requires taking chances. Taking risks is part of what banks do. When depositors leave their money in a bank, they are actually lending it to the bank.

SMEs can enjoy lower financing costs offered by this scheme with a 2% reduction in financing rate. Sukuk issuers also benefit from the three year extension of the double tax deduction for additional expenditure incurred for sukuk issued under Ijarah and Wakalah principles. Other cost savings for sukuk issuers include reduction in professional fees relating to due diligence, drafting and preparation of prospectus; and various fees charged by Securities Commission Malaysia and Bursa Malaysia. Islamic finance is anchored on sustainable values beyond profit The unique propositions of Islamic finance are drawn from its underlying Shariah principles that have universal applications, which fundamentally advocate the prevention of harm or attainment of benefits. All Islamic finance transactions must reflect Islamic values which are ethical and fair. Any financial conduct or transaction relating to goods or services that are contrary to Islamic principles are prohibited, thus promoting fairness, equality and justice. As such, Islamic finance practitioners are duty-bound to observe the norms of high ethical conduct to uphold the values and the sanctity of Shariah. Businesses can therefore take assurance that their financial needs are well served, managed and protected. For the halal industry, players could benefit greatly from appropriately raised funding and protection, which ultimately nurture an end-to-end halal ecosystem. Beyond this, the Islamic financial system also promotes Value-based Intermediation (VBI). Through VBI, Islamic financial institutions are encouraged to adopt more structured frameworks to assess how they create value and impact, particularly in response to changing economic, social and environmental conditions.