, the u. s. economy. for example, before the federal reserve was established, check clearing fees and banks ’ efforts to avoid them often led to circuitous check routing, with recipients facing long, unpredictable delays in receiving their money. when they did eventually receive their money, fees had often consumed a considerable portion of what they were expecting. in extreme instances, this led to checks moving from city to city before eventually ending up at their destination. one often - cited example described a check that started in rochester, new york, and traveled to jacksonville, florida, then to philadelphia, baltimore, and cincinnati before it finally reached its final destination in birmingham, alabama. 6 to put that in terms of miles traveled, if the check had gone directly from new york to alabama, it would have “ policies : the federal reserve in the payments system, ” board of governors of the federal reserve system ( issued 1984 ; revised 1990 ), https : / / www. federalreserve. gov / paymentsystems / pfs _ frpaysys. htm. noted by federal reserve chairman w. p. g. harding in robert kramer and w. putnam livingston, “ cashing in on the checkless society, ” harvard business review, september / october 1967, p. 143 ; bill medley, highways of commerce : central banking and the u. s. payments system ( kansas city : federal reserve bank of kansas city, july 2014 ), p. 23, https : / / www. kansascityfed. org / ~ / media / files / publicat / highwasyofcommer / highwaysofcommerce. pdf? la = en. - 4traveled about 1, 000 miles. instead, it traveled 3, 000 miles up and down the east coast, likely for days, before it finally reached its destination. the distance from atlanta to los angeles is shorter than the route that check took. these kinds of inefficiencies were so significant that one of congress ’ s motivations in creating the federal reserve was ensuring a safe and efficient nationwide payment infrastructure. shortly after they opened for business, the reserve banks began providing a nationwide check collection service. this service helped speed up payments by reducing circuitous routing. it also facilitated access to more - efficient payment services for banks across the nation. since then, the federal reserve has continued to support ongoing efficiency improvements in the nation ’ s payment system, including the development of the fedwire funds transfer system

“ return - to - basics ” investor demand. following the global financial crisis, investors have become more averse to the unknown risks embedded in complex financial instruments. islamic finance, with its stronger emphasis on transparency, price certainty and risk - sharing, can benefit from this renewed demand for more basic investments, from muslim and non - muslim investors alike. integrating islamic finance with global finance the third, and perhaps most important, challenge that islamic finance must overcome is its present fragmented state. islamic finance currently suffers from low economies of scale. the overall size of islamic assets is still less than 1 % of the global financial system. being smaller and relatively young, islamic finance currently offers fewer product choices for consumers and less comprehensive risk management options for institutions. cross - border investment flows are also constrained by differing interpretations of permissible transactions under bis central bankers ’ speeches shariah principles. the isolated pools of islamic liquidity in each market restrict opportunities for more efficient allocation of capital across consumers, industries, and jurisdictions. islamic finance must become more integrated with the global financial system. the industry must expand beyond its traditional markets to include a wider range of financial institutions, investors and consumers. this means islamic finance must strike roots in the key international financial centres of the world. these centres can contribute to islamic finance in several ways. first, market liquidity. the broad and deep investor pools in international financial centres offer an opportunity to channel non - traditional sources of funds into islamic finance. in singapore, for instance, several local and foreign issuers have successfully tapped the capital markets using islamic instruments. the demand comes from not just singapore but a diverse group of international investors across asia and europe. many of them are conventional investors, attracted by the credit quality and yields. second, capabilities in global financial markets. islamic finance should leverage on the capabilities and strengths offered by conventional financial markets in international centres, to augment the range of shariah - compliant products. take for example the market for real estate investment trusts, or reits. singapore has grown over the past decade to become the largest reit market in asia outside of japan. building on this strength, players in singapore have established the world ’ s largest shariah - compliant reit, which draws in conventional and islamic investors around the world. third, opportunities for interaction and collaboration. as islamic finance gains prominence, conventional financial institutions increasingly want to be involved to tap these opportunities. financial centres like singapore serve as intersecting nodes where islamic financial institutions collaborate with their conventional partners to