This is a dynamic process as the requirements and expectations of consumers are also changing rapidly in tandem with the increased education levels and growing affluence. In recent years, consumers have become more discerning and demanding better product choices, more efficient delivery channels and more customer friendly practices from takaful operators. Bancatakaful, for example, has made noticeable headway to account for 20.4% of takaful contributions in 2005, compared with only 6.5% in 2004, reflecting the consumers' preference for selected products to be made available through this channel. While product offering among takaful operators will eventually converge, the consumers ultimately expect speed in service delivery, simplicity in dealings, stretching or going the extra mile in satisfying customer's needs and unquestionable integrity. Thirdly, Malaysia still has competitive advantage in terms of takaful and is well-positioned to be a takaful and retakaful hub in this region . During the past two decades, we have seen the gradual opening up of takaful operation in many jurisdictions throughout the world, primarily in Islamic countries and countries with large Muslim communities. In this period, Malaysian takaful industry has gained significant attention with the remarkable growth rate recorded domestically and in other countries as far afield as Saudi Arabia. Malaysian takaful industry alone successfully garnered approximately 26% of global takaful contributions and our takaful operator has been recognized as among the leaders at the global front.

Only one merger has taken place so far, between DBS and POSBank. But I know that all the banks are alive to the competitive trends, and are continually reassessing their position. It is a dynamic situation, and the present configuration is unlikely to be permanent. Regulatory cooperation and harmonisation The second dimension of financial integration is the trend towards greater regulatory cooperation and harmonisation. Starting in the 1980's, a series of international fora were created for regulators and policymakers to share experiences, cooperate with one another, and harmonise regulations and  2  BIS Review 45/2001  policies. Among the multilateral initiatives, the efforts of the Basle Committee and IOSCO are probably the best known. The Basle Capital Accord of 1988 helped to increase the capital held by internationally active banks, and to create a more level playing field for banks under different regulators. The new Basle standards now being finalised will remedy the weaknesses of the 1988 Accord, and enable banks to set aside capital in accordance with the riskiness of their assets. IOSCO has provided securities regulators globally with a useful platform to exchange views and enhance cooperation on issues relating to the regulation of the securities markets. It has developed a common set of objectives and principles of securities regulation, which enhance mutual understanding among securities regulators and commissioners. IOSCO has also been actively involved in promulgating standards of public disclosure, and facilitated cross-border capital raising and listings. The Asian crisis has added impetus to the harmonisation of regulatory standards.