More recently, there has also been an increased global engagement in Shariah matters among scholars, practitioners and regulators through international platforms. This is a remarkable achievement, given that much of these developments have taken place amidst the tumultuous global financial environment. In parallel with the rapid internationalization of Islamic finance, this recent decade has seen the increased emphasis being given to the development of the international financial infrastructure relating to financial stability in Islamic finance. This is another important area in which significant milestones have been achieved. In 2002, we saw the establishment of the Islamic Financial Services Board (IFSB) as the international prudential standard setting body for the Islamic finance industry. The work of the IFSB has been crucial to support the orderly global expansion of Islamic finance thus ensuring a cohesive cross-border regulatory framework and international best practices for the Islamic financial system. A more recent initiative to support the role of the IFSB in promoting the financial stability of Islamic finance is the landmark establishment of the Islamic Financial Stability Forum (IFSF). Formed with the mandate to serve as a platform for information exchange and engagement between the authorities responsible for financial stability in the Islamic financial system, the Forum has a major role in promoting effective cross-border cooperation, an aspect which has become crucial in the context of maintaining financial stability in a rapidly globalizing marketplace.

An important development in this decade has been the growing significance of the international dimension of Islamic finance and its increased role in the international financial system. Islamic finance has, during this period, been expanding steadily at a double digit pace of growth. The total Islamic financial assets size is estimated to be more than $ trillion. Such dynamic growth has been driven by two key factors: firstly, the pace of innovation in Islamic finance has been able to provide the extensive range of financial solutions to households, businesses and governments with attractive pricing and innovative structures; and secondly, the resilience derived from its inherent features which has provided the foundations for financial stability in the Islamic financial system. The advancement that has been achieved in the sukuk market in particular, testifies to the ability of Islamic finance in meeting the requirements of today’s differentiated demands of the modern economy. The Sukuk epitomises the very ingenuity in Islamic finance. This important segment of Islamic finance has seen a dynamic stream of cutting edge products and structures. Sukuk is distinct in its role as a platform upon which international inter-linkages are fostered. The sukuk market has demonstrated its ability to effectively intermediate funds across borders and thus contribute towards the efficient allocation of funds in the international financial system. On the supply side, it has drawn the participation from corporations, sovereigns and multilateral agencies. On the demand side, it has now become part of mainstream asset allocation strategies for investors seeking greater risk diversification.