The increased focus on financial stability has several implications for the new financial landscape. The most significant will be the fundamental changes in the regulatory environment. These include changes to institutional arrangements for oversight of the financial system – both at the international level and within national borders in a number of countries, significantly strengthened prudential standards with a focus on building stronger capital and liquidity buffers, increased transparency in financial transactions and exposures, and enhanced options to resolve failed financial institutions. Much progress has already been made by the Islamic Financial Services Board in promulgating an extensive set of prudential standards for the Islamic financial services industry since its establishment in 2002. The IFSB has already introduced standards for capital adequacy, risk management, corporate governance and Shariah governance. This important work has been significant in promoting international uniformity of the regulatory  BIS central bankers’ speeches  3  framework and international best practices for the Islamic financial system in different jurisdictions. The IFSB has also established a facilitative platform to promote overall financial stability through the Islamic Financial Stability Forum (IFSF) that serves as an avenue for cross-border engagement amongst regulators. The important goal of strengthening the foundation of the global Islamic financial system has also been reinforced further following the recent global financial crisis, through the work of the IFSB-IDB Task Force of Islamic Finance and Global Financial Stability. In its report that was released in 2010, eight building blocks were identified to manage potential risks and vulnerabilities to the Islamic system.

Prophet Muhammad (S.A.W), in a hadith in Musnad Ahmad mentioned that mankind would be rewarded for efforts in improving greenery; making it incumbent on every Muslim to contribute towards such efforts. In terms of the relationship between mankind and the environment, the teachings of Islam basically promote preservation of natural resources and the need to respect all living things. Failure to do so would be detrimental, as stated in verse 41 of Al-Rum where severe destruction of the land and sea would come upon those who mistreat the environment. It is therefore crucial for everyone, including Islamic banks to consciously play their role towards ensuring environmental sustainability. Achieving environmental sustainability is the responsibility of everyone and the banking industry must do its part. The role of Islamic banks extends beyond being a component of a financial system, but as part of a total value-based social system that is driven by the principle of public interest or maslahah. This system seeks to enhance the general welfare of society. Environmental protection and sustainability should be part of the Islamic finance agenda to ensure the fulfillment and establishments of the spirit of Islamic tenets. As the global economy is transitioning towards a low-carbon and more sustainable model, the industry can contribute immensely towards the greening of the world. Islamic financing facility for green technology is another growth area worth engaging and with the necessary incentives and infrastructure in place, our Islamic banks are capable of becoming a significant player.