for us to advance relations in this area between jbic and the central bank of malaysia. in addition, a japanese consumer credit company based in malaysia marked another significant milestone by issuing an islamic commercial papers early this year. the changes that have occurred in the economic and financial environment in our region and the global environment have presented us with wide ranging new opportunities. the partnership between malaysia and japan thus not only needs to evolve not only in the trade in goods and direct investment but also needs to encompass growing financial ties. islamic finance represents a vehicle that could further deepen our financial relationship and the regional integration process. in enhancing these new linkages and greater integration, it would contribute towards unlocking the new potential opportunities for our mutual prosperity. thank you.

malaysia has also continued to progressively liberalise its already open financial system to further enable free flow of funds into and out of the system. this transformation has opened up the potential for a range of new opportunities for participation in the financial sector in malaysia and for facilitating greater financial flows within the region. new linkages and opportunities offered by islamic finance this decade has also witnessed a rapid evolution and global expansion of the islamic financial services industry. malaysia has developed a comprehensive islamic financial system that operates in parallel with the conventional financial system. more recently, its international dimension has gained significance as islamic finance is becoming an increasingly important part of the international financial system. in doing so it is contributing to strengthening international interlinkages between financial markets and systems that is more widespread and inclusive. the number of islamic financial institutions worldwide has increased to more than 300 spanning over 75 countries. total assets of the islamic financial system are estimated to exceed one trillion us dollars. it is among the fastest growing financial segments in the world with an estimated annual growth in the region of 15 to 20 percent. there is now a growing strong demand for islamic financial product in the global market, far exceeding the current availability of financial products and services being provided by the islamic financial institutions. the global development of the islamic financial system has become particularly important in this more challenging financial and economic environment. as the international financial system becomes more diversified and as this new form of financial intermediation develops, it has presented businesses with alternative means of raising funds while investors are presented with new asset classes. it has contributed towards greater diversification of risks. more importantly, the very fundamental requirement of islamic finance is that it requires an underlying economic transaction thereby avoiding emphasis on speculative purposes. it also prohibits the commoditisation of risks, which leads to its proliferation through multiple layers of leveraging and disproportionate distribution. islamic finance as a form of financial intermediation will also contribute towards enhancing the efficient mobilisation and allocation of funds across regions. this will bring about strengthening of a more wide spread and inclusive global financial integration. the greater diversification of risks also contributes towards promoting international financial stability. the transparent nature of islamic financial contracts and the need for underlying economic transaction reinforces the stability of the islamic financial system. going forward, in the current liberalised and globalised environment, islamic finance is at the threshold of a new dimension in strengthening financial interlinkages between nations across the globe. just as the old silk road in the 14th century offered a route that