years, issuances out of the emerging economies, in particular asia, will also likely assume greater importance as an asset class. the greater variety of asset classes would contribute to the stability of the international financial system. it will also provide a wider range of options for investors and borrowers and thus, contribute to a more efficient allocation of financial resources across borders. it should be emphasised that the impact of asia ’ s economic and financial integration, would extend beyond its own region to other parts of the world. today, the economic and financial linkages between the emerging economies have gained significant traction and are likely to continue. all the issues that i had mentioned earlier would only be significantly realized if we have a seamless payment system that links markets as one. as part of our continuing journey in deepening and strengthening our financial markets in asia and malaysia in particular, bank negara malaysia is pleased to be a party to the launching of the pilot platform for cross - border investment and settlement of debt securities, jointly with the hong kong monetary authority and euroclear bank. this initiative marks an important milestone in our vision towards deeper financial integration. the rollout of bis central bankers ’ speeches this platform will provide investors and market intermediaries with more efficient and cost - effective cross - border access to the bond markets in hong kong and malaysia. over the years, the bond market in asia has expanded significantly. to date, asia ’ s share of the global bond market has increased by almost four - fold since the pre - asian financial crisis. in tandem with the growth of the bond markets, the sukuk market in the region has also evolved as an important avenue for international fund raising and investment activities, generating significant cross - border flows. malaysia has been an important part of this development with well developed bond and sukuk markets. as at 9 march 2012, the outstanding amount in the malaysian bond market was rm899 billion compared to rm301 billion at the end of 2001. this represents a 300 per cent increase over the last decade. within the region, both hong kong and malaysia have participated actively within the emeap group in promoting regional bond market development initiatives such as the asian bond markets initiative and the asian bond fund. i am confident that this pilot platform will bring benefits, not only to hong kong and malaysia, but the region as a whole. we envisaged that this pilot platform will increase the efficiency of issuance, investment and settlement of bonds through the increased harmonisation

level of financial literacy among the consumers and businesses. towards achieving this objective, consumer education programs have been conducted, providing information among others, on the unique characteristics of islamic banking and finance, islamic financial products and services and the underlying shariah principles and concepts. enhanced consumer awareness is expected to strengthen the role of market discipline in driving the islamic financial institutions towards strict shariah compliance, enhanced operational efficiency, and strengthened risk management infrastructures and practices. in malaysia, islamic banks and conventional banks with islamic banking windows observe similar prudential standards as imposed on conventional banks such as the minimum risk weighted capital ratio ( rwcr ), standards for corporate governance and risk management, financial disclosures and know your customer policy. the principles of prudent management and enhanced operational efficiency are inculcated through the minimum risk weighted capital adequacy requirement. corporate governance standards have been enforced through specific guidelines on the code of conduct for directors, officers and employees of the banking institutions and guidelines on the directorship and prohibition of loans to directors, staff and their selected corporations. in addition, strict compliance with the tenets of shariah would also ensure that the islamic financial institutions are managed on the basis of a high degree of prudence, ethics and integrity. the basel committee on banking supervision has enhanced its capital regulation to include operational risk in the computation of capital adequacy, in addition to credit and market risks. the task of formulating a framework that addresses the peculiar risks associated with islamic banking is being undertaken by the islamic financial services board ( ifsb ), which serves as an international standardsetting body for regulatory and supervisory agencies. its mandate is to develop prudential, regulatory and disclosure standards for islamic finance, and promote uniformity in the best practices on the governance of islamic financial institutions worldwide. in this respect, the ifsb has recently issued two prudential standards on risk management and capital adequacy for institutions offering islamic financial services, which are recommended for implementation in 2007. the ifsb has also made progress in developing three other standards on corporate governance, transparency and market discipline, and the supervisory review process to be released in due course. a key challenge in managing operational risk in islamic banking is ensuring shariah compliance. bank supervisors in their assessment would need to give due attention to the adequacy of the financial institutions'board and management oversight, policies, procedures and limits, risk measurement, monitoring and management information systems, and internal controls. the