##ebtedness. most certainly, such principles cannot be harmful to borrowers! another principle in islamic finance that sets it apart from conventional finance – and which assumes a particular relevance in the global financial crisis – is that uncertainty in contractual terms and conditions is not permissible. all the terms and conditions of a financial transaction need to be clearly understood. this principle has insulated islamic financial institutions from exposure to toxic assets. fools rush in where angels fear to tread, they say. then the herd instinct takes over … and before you know where you are, you find yourself in the kind of crisis that has engulfed conventional finance, in particular, the world of shadow banking. islamic finance operators do not have this option. they can only enter ground that has been declared compliant by sharia scholars. global financial crisis the current global financial crisis has brought into sharper focus some worrisome aspects of contemporary financial markets. at the heart of our current global crisis has been the fateful distance of much of modern finance from the real economy. per contra, at the heart of islamic banking and islamic capital markets is the salutary insistence on bringing these two elements closer together. we cannot turn the clock of globalisation and of global finance back. but we do need to look for a better way of managing our affairs insofar as money and finance is concerned. to quote raghuram rajan, former chief economist of the imf, the time has come for “ regulatory soul - searching ”. the economic model which follows from islamic finance is very different from the “ originate and distribute ” model which has failed conventional finance so spectacularly. the founding principles of islamic finance, the prohibition of interest and the close linkage between the real economy and finance, offer a viable alternative to the conventional financial system. at a time when global conventional finance markets are in such a state of turmoil, islamic finance does represent an appealing alternative. the short - term fixation on private benefits by hook or by crook, which has turned yesterday ’ s financial wizards into today ’ s leading exponents of white collar and financial crime, must give way to a clearer focus on the longer term and the public good aspects of our financial interaction with our fellow - man. now, in today ’ s world, keynes and his precepts are experiencing a revival. it has taken open clamouring for government interventionism and the introduction of fiscal stimulus measures on a mind - boggling scale to remind us that “ we are all keynes

, and it is heartening to see our efforts have started to bear fruit. the dodo is finally meeting the camel! but you might ask why this image of the dodo and the camel that appear on our posters for this event? for our overseas visitors who may not know it, the dodo is that legendary but extinct species of bird that died out in mauritius not long after man first set foot on our previously uninhabited island. the dodo failed to adapt and paid the terrible price of this failure. its memory lingers in the logo of our central bank. it serves as a symbolic warning and a reminder of the fate that awaits those who do not adapt to change. the camel, of which i believe none exists in mauritius, comes to us today, as a symbol of that species that is well adapted to that harshest of environments, the deserts of arabia ; it is that seasoned traveler who, when water is scarce, carries it on its back in its god - given hump. this meeting of the dodo and the camel is not an image from samuel huntington ’ s “ clash of civilizations ”, in which those of sharply differing cultures are doomed to eternal conflict. no, indeed, our meeting here is just the opposite. it is a meeting of minds intent to seek fresh thoughts on sustainable banking and this, not merely to avert the fate of more species like the dodo, threatened by global warming and the carbon imprint of man, but to also avert the very recurrence of the financial and economic crisis that engulfs the world today, capital markets and banking in particular. about the ifsb for those who might not be in the know, the ifsb, a kuala - lumpur - based organisation, was set up in 2002 to promote soundness and stability in the islamic financial services industry. since its inception, the ifsb has been actively engaged in the development of international standards and guidelines for the islamic financial services industry. the prudential standards adopted by the ifsb are globally accepted and are contributing to the smooth integration of islamic finance with the conventional financial system. the ifsb also provides a platform which brings together all the stakeholders of the industry : regulatory agencies, private sector operators, rating agencies, professional associations, as well as regional and international financial institutions. islamic banking is a multi - billion dollar industry in global and national finance. it also happens to be growing at a very rapid pace. in the midst of financial and economic crisis, the if