It therefore has limited exposure to highly leveraged activities, such as complex derivatives and structured credit instruments. Indeed, Islamic finance emphasises a close link between financial transactions and real economic activity. Islamic finance thus serves the real economy. The recent financial crisis has therefore led to a greater appreciation on the distinct nature of Islamic finance in addition to its explicit in-built strengths that supports financial stability. These foundations have been reinforced by the global efforts taken to strengthen the international financial architecture of Islamic finance to safeguard financial stability and thus its sustainability. In the recent years, the intermediaries have also gained scale and the financial markets have gained depth and maturity. Among the institutional arrangements in the international Islamic financial system, is the establishment of the Islamic Financial Services Board in 2002 to set prudential standards while earlier in 1990, the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) was established to set the accounting standards for the financial industry. Various jurisdictions have now undertaken legal and regulatory reforms to pave the way for the offering of Islamic finance in their respective countries while ensuring attention to sustaining financial stability. These developments have been particularly important to the recent intensification of the internationalisation of Islamic finance which in turn contributes towards building bridges and forging greater linkages among a wider range of economies. Transitioning into the next stage of growth of Islamic finance It is of no doubt that we are now facing the most challenging economic and financial environment in decades.

There has also been greater international dialogues between global Shariah scholars through several platforms and structured forums. This greater engagement facilitates convergence in interpretation and the greater leverage on technology for the active dissemination of information at real time further facilitates the harmonisation process. The next stage however is the need for more efficient information dissemination that would promote greater market transparency, price discovery and industry insights. The development of the Islamic Financial Knowledge Repository Portal by ISRA that will be launched today will be an important effort that can contribute to meeting this objective. As a knowledge database it centralises Shariah rulings and its justifications, legal and regulatory requirements. This is enriched by the latest collection of research and development in Islamic finance. This database will become an important source of reference and guidance for Shariah and industry practitioners, policy makers, researchers and academicians. This initiative by ISRA will not only promote greater understanding but mutual respect and recognition of Islamic finance. Concluding remarks The global Islamic finance industry is transitioning to its next stage of development and will stand to benefit from an enhanced universal appeal with a wider consumer and business segment, greater financial inclusion and harmonisation through increased research and development and more effective dissemination of information. A strong culture of applied research and development in Islamic finance that promotes innovative financial engineering, through practical and useful applied research findings is an integral part of industry-building efforts to support the industry’s growth.