Joint efforts between academia and industry to conduct research, to explore and deliberate on issues relating to the development of new Islamic financial products, such as the efforts that have led to this conference can therefore provide a point of reference for the industry in ensuring that new and better products are developed to match the diverse and discerning needs of customers, while meeting the requirements of the Shariah. The ability of Islamic finance, as a form of financial intermediation that provides a range of high quality financial products and services, reflect the innovative and dynamic nature of the industry that contributes to its role as a facilitator of economic activity. Together with the fundamental requirements in Islamic finance that an underlying productive economic activity accompanies financial transactions, a close link is formed between financial transactions and productive flows. Given that Islamic financial instruments reflect the underlying economic activities and that such instruments inherently have the potential to provide tangible returns to investors, there have been significant demands on such products. This gives rise to the competitiveness of Islamic finance, which is further spurred by the proliferation of competitively priced Islamic financial products that is more evident in this recent decade. In more recent times, there is increasing awareness and appreciation amongst the international financial community on the distinct nature and inbuilt strengths of Islamic finance. The recent global financial crisis has brought about, among others, an opportunity for Islamic finance to strategically position itself as a stable form of financial intermediation.

Mohd Razif bin Abd Kadir: Islamic banking products – theory, practice and issues Opening remarks by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the 2nd Foundations of Islamic Finance Series Conference: “Islamic banking products – theory, practice and issues”, Kuala Lumpur, 8 March 2011. *  *  *  I am delighted to be here today and would like to thank the organisers for inviting me to deliver the opening address at this 2nd Foundations of Islamic Finance Series Conference. Following the success of the inaugural conference held last year in Dubai, this years event is a commendable collaboration between the organisers; the International Centre for Education in Islamic Finance (INCEIF), the International Shariah Research Academy for Islamic Finance (ISRA) and the University Putra Malaysia, to provide an avenue for discussions on various literatures in Islamic finance by eminent practitioners and scholars, with the aim to produce quality publications for the industry. The theme of this years conference, “Islamic Banking Products: Theory, Practice and Issues” is most timely as waves of innovation are pervasive in Islamic finance in the recent years, fostering the generation of a wide spectrum of Islamic financial products and services. As the next frontier of development in Islamic finance evolves through innovation, we have to be mindful that innovation within an environment of constant change and increasing uncertainties is indeed a challenge.