are coherent. regulators have dealt with the under - pricing of liquidity risk in part by remedying inadequate capital requirements. but, as i said earlier, it is quite conceivable that given the range and speed of regulatory reforms, there are parts of the framework that might not work in the way we intended. as i mentioned, the open forum on 11 november will be another opportunity to assess this issue. the aim is to bring stakeholders together from across financial markets to discuss how we build markets for the public good. second, changes in market structure and the ability of technology to connect buyers and sellers may increase liquidity. there are a number of suggestions that with the growth of assets under management asset managers and institutional investors may in future need to deal more bis central bankers ’ speeches directly with each other and might be better placed to take on some of their risks. technological change would certainly make this increasingly feasible. it remains for me, however, an open question whether such liquidity would be resilient in times of stress. automated markets may have driven down costs, but are possibly less resilient. dealer - intermediated markets, on the other hand, may have become more costly, but possibly more resilient. in a forthcoming speech, my colleague minouche shafik will discuss the changes in market structure that we have seen since the financial crisis and what they mean for market functioning. and, of course, the higher costs of assets with poor liquidity characteristics may have changed the economics for issuers of liabilities such as corporate treasurers which may encourage more standardisation of terms to improve liquidity and reduce costs. it is, however, important to look not only at how to improve the resilience of markets to imbalances between sellers and buyers at times of stress. we need also to look at whether and how the features of financial markets can amplify these imbalances by creating selling pressure. correlated trading is one example. such trades arise when the demand for an asset ceases to fall materially as prices rise, and vice versa. they turn the law of supply and demand on its head. this may be caused by the prevalence of algorithmic momentum traders in a market or the use of industry standards and benchmarks that influence asset allocation and peer assessment. consensus trades are another example. they occur when investors take positions on the basis of prevailing market norms as opposed to conviction in their view of the future path of economic fundamentals. consequently,

finance is no longer limited to muslim nations and muslim communities. the world realizes the economic clout of 1. 5 billion people is a market that cannot be ignored. the islamic finance market offers an enormous potential for future growth. long established financial centers such as london, hong kong, tokyo and singapore have already begun the first steps to enhance their respective centers into vibrant islamic financial centers. opportunities in islamic finance this would raise several implications and opportunities for the development of islamic finance. the increased competition where non - traditional players will enter the industry bringing with them superior system, management skills, established r & d and risk management system with proven track record globally will spur growth or at least maintained at an already phenomenal growth in islamic finance. there will be more innovative products, new concepts and new structures, as the new players bring with them new value proposition to attract or entice their customers. demand will grow for services related to islamic finance in the areas of consultancy, accounting, trust, shariah, legal advice and it services. new shariah concepts will emerge and this will require scholars to rethink some of the structures that had been well established. in addition, new demand for standardization and harmonization of shariah standards would intensify as cross border transactions increases. this will also result in an increase in demand for financial products that can be sold between markets. malaysia ’ s islamic financial industry malaysia is well positioned to take on this competition. the path for the development of islamic finance started as far back as 1983. from the building of the foundation of legal, regulatory and shariah framework, the islamic banking act ( 1983 ) to the formation of the first islamic bank and takaful company to instituting islamic windows concept for banking institutions and encouraging competition amongst the islamic financial institutions in the nineties ( 1990s ), to establishing key infrastructures and institutional arrangements such as the shariah advisory council and the islamic money market, we are on a mission to be the center for islamic finance. today we have a comprehensive system for islamic finance but as you would expect, because of competition and the fast changing pace of the banking industry, we must continue to strive to maintain the lead in this industry. there are a few pre requisite to maintain this competitive edge. it is the ability of the industry to meet the evolving and discerning needs of the users of islamic finance and the ability to meet those needs in a timely and comprehensive manner. the solutions to customer needs must be