The IEO report provides an independent assessment of the Bank’s reinforcement of this area over the past few years, which goes above and beyond international requirements, reflecting the growing importance of this nationally and internationally systemic architecture. The IEO concluded that: “Investments made by the Bank in recent years have had the desired effect. Our view is that the Bank is delivering effective, risk-based and forward-looking supervision in respect of FMIs.”  The IEO report offers a number of important recommendations as to how the Bank can further strengthen its oversight to ensure it continues to keep pace with the growing importance of the infrastructure and the new challenges I have tried to outline today. The Bank welcomes these recommendations and has set out in our published response how we are implementing them. It is important that all national authorities responsible for globally systemic infrastructure are accountable and subject to evaluation. The CPMI-IOSCO peer reviews and the IMF’s Financial Stability Assessments have a crucial role to play in providing assurance. We also hope that others may also draw lessons from our IEO evaluation. Higher international standards, robust peer review and evaluation of national authorities are clearly necessary conditions for effective management of the financial stability risks inherent in these crucial global pipes. But they are not sufficient conditions. As we learned very painfully in the crisis, globally systemic firms require intensified supervisory cooperation between national and where relevant regional authorities.

To start with, the focus of these efforts will be on renewable energy, efficient energy, and primary commodities. This year also witnessed the launch of an Islamic Index-based investment scheme, which has embedded environmental, social and governance (ESG) principles, and the launch of working capital financing for women entrepreneurs. In the same vein, the takaful sector is also moving towards integrating VBI elements, with the establishment of the VBI Takaful Task Force by the Malaysian Takaful Association (MTA) to look into establishing a strategic roadmap on VBI implementation by the takaful industry. Success of these initiatives require conviction and commitment by the industry leaders to actively pursue these as an important agenda for Islamic finance. Therefore it is imperative that the industry leadership to also support this with talent development strategies to equip the Islamic financial institutions with the right talent pool. These include re-evaluating and refining the learning and development requirements, anchored at incorporating new learnings and more understanding of businesses that translate into value-added services to clients and addressing gaps in skills and competencies required to support the industry in this strategic direction. Indeed, to fully realise the strategic intent of Islamic finance, we must ensure that the talent pool is supportive through the development of the next generation of Islamic finance professionals. This requires the industry to come together to elevate the value of Islamic finance talent through the pursuit of professional excellence.