This is no surprise given the rich cultural heritage in both our countries. It seemed to us, however, that as central banks we should devote today’s symposium to economic history and analysis. Japanese philosophy teaches us that “visiting the past teaches us new things" (“fuluki wo tazume atalashiki wo shilu”). I’m pretty confident that the historical approach of our morning session will shed light on the more recent economic developments that will be our focus this afternoon. Modern central banks emerged with the advent of industrial economies in order to facilitate trade and centralise the regalian function of issuing currency. While being strictly national, the issuing banks of 150 years ago quickly became used to keeping pace with globalisation. From the nineteenth century onwards, the appearance of central banks and the emergence of their role allowed them to meet the needs of economies that were already global, with an integrated production function in the wake of the industrial revolution. Lenders of last resort in critical moments and ultimate guarantors of their currencies, central banks extended their role in the twentieth century to include the construction and monitoring of business cycle indicators by drawing on highly-specialised knowledge of the credit sector, built up both in France and Japan through their branch networks. As well as producing statistical data and remaining vigilant with regard to internal stability in a more open and flexible environment, our central banks also became responsible for the external value of money in this period, and played an active role in international bodies.

The asset-backed nature of Islamic finance makes sukuk ideal for financing of infrastructure projects and would complement ongoing work by Singapore to enhance the bankability of infrastructure projects in the region and involve more capital market participants. 13. In the meantime, it will be important to continue to strengthen key foundations such as global regulatory standards and best practices for Islamic finance, and capacity building and talent development. To facilitate further growth of Islamic finance in Singapore, MAS is working with the industry and other government agencies to provide clarity and certainty in the regulatory and tax treatment for sukuk. For example, some industry players have suggested that pre-approved standardised templates for common sukuk structures could be introduced to expedite issuance. 14. Building Islamic finance expertise has also been highlighted as crucial to supporting the continued growth of the industry. The Singapore Management University’s (SMU) International Islamic Law and Finance Initiative is now in its 6th year, and seeks to carry out research and develop thought leadership in Islamic law and finance, in collaboration with institutions in UK, Malaysia and Indonesia. SMU also offers a Masters in Islamic Law and Finance, and will be graduating its third cohort of students this year. In addition, Islamic finance has also been included as an eligible subject area under MAS’ Finance Scholarship Programme, and industry players could look to tap on this scheme to groom promising talent. Conclusion 15. To conclude, the deepening linkages between Asia and Middle East will continue to present significant opportunities for Islamic finance.