In addition, there is the development of Islamic indices, information repositories and consultancy services. In the areas of human capital development there is a proliferation of programmes and certifications that focus on Islamic finance. Malaysia is committed in this pursuit and has put in place a comprehensive talent infrastructure in Islamic finance with the aim of meeting the increased demand for practitioners by the global Islamic finance industry. Dedicated institutions of learning such as the International Centre for Education in Islamic Finance (INCEIF) and the Islamic Banking and Finance Institute (IBFIM) have been established to focus on education in Islamic finance. Increased international connectivity and Islamic finance Despite the continued strains experienced in the economy and the international financial system, it is important to recognise the fundamental long-term global transformation that is taking place. In this recent decade, the concurrent rise of the emerging economies is resulting in a fundamental realignment in the global landscape. This transformation is characterised by the shifting balance of global economic strength to the emerging economies, with its significant implications on the global economic and financial flows. The international financial landscape will also be inevitably transformed with the distribution of financial centres becoming more dispersed. Increasingly, new centres of financial activities will likely to emerge. In addition, financial system inter-linkages – particularly among the emerging economies – will deepen, supported by the increased global trade and investment that is already taking place.

Recent examples include the USD500 million Islamic Infrastructure Fund established in 2009 by the Asian Development Bank (ADB) and Islamic Development Bank (IDB) to meet the Shariah-compliant financing needs in the member countries. In addition, the advancements achieved in the sukuk market also provide evidence on the ability of Islamic finance in meeting the requirements of the differentiated demands of the modern economy. The recent issuance of the world’s first offshore RMB sukuk by Khazanah Nasional in Malaysia reflects the growing trend of multi currency sukuk issuances in Asia. Growing at an average annual rate of 40 percent, the global sukuk market has demonstrated its ability to effectively intermediate funds across borders, allocating funds efficiently in the international financial system and fast becoming an important financing and capital raising option. Islamic finance and financial stability An important aspect of the new financial landscape is the increased focus on financial stability. The more market oriented systems with market-based finance activities, the creation of new financial instruments and an increasing number of market participants with global reach, and more interconnected financial systems has expanded the potential for, and channels through which, financial shocks are transmitted to the economy and across borders. Indeed, recent experiences with crises have also shed new insights into the complex web of relationships that exist between sovereign, financial and economic risks, and underscored the critical importance of strengthening the pillars of financial stability that can serve to contain the impact of a crisis.