zeti akhtar aziz : towards the positioning of islamic finance as an integrated component of the international financial system opening speech by dr zeti akhtar aziz, governor of the central bank of malaysia, at the 5th annual islamic finance summit, london, 24 january 2006. * * * it is my great pleasure to be here in london to speak at this 5 th annual islamic finance summit organised by euromoney. islamic finance has made significant breakthroughs to now gain a place in today's challenging global environment with its international dimension now becoming increasingly more significant. it has now evolved to become an integral part of the international financial system. as this international financial integration process intensifies, it will not only increase the potential for islamic finance to contribute towards enhancing the prospects for more balanced global growth through fostering greater trade and wealth creation, but also through facilitating greater diversification of risks, it will contribute towards increased global financial stability. rapid evolution of the global islamic financial services industry as recent as five years ago, the development of islamic finance was still regarded as an infant industry striving to prove its viability and competitiveness in the global financial environment. at that time, the growth of islamic finance was mainly organic and largely concentrated in countries where the muslim population was significant. islamic finance was also for the most part governed by conventional regulatory and accounting standards. in addition, the divergence of views on some of the outstanding issues called for greater harmonization. indeed, there was also some apprehension amongst the regulatory authorities, consumers, business communities and investors on the future potential of islamic finance. notwithstanding this, over the recent five years, there has been a rapid evolution and expansion of the industry. today, islamic finance has been recognised as a viable and competitive form of financial intermediation not only in muslim countries but also outside the muslim world and offering a wide range of financial products and services. licences are being issued to facilitate the establishment of islamic banks including in the industrial economies in western jurisdictions. there are also an increasing number of international conventional banking institutions offering islamic financial products and services through dedicated subsidiaries or branches as well as through window arrangements. in addition, countries that have pockets of muslim population, in particular, in the asian region are now exploring the prospect of providing access to islamic financial services to promote greater inclusion. these trends have not only been in terms of numbers of islamic financial institutions, but also in terms of institutions with larger size of capital and a more established operational governance framework including risk management

4 percent ) and slightly below poland ( 79. 6 percent ). however, growth in romania was not evenly distributed. bucharest is currently above one hundred sixty, while much slower converge took place for other regions. i cannot emphasize strongly enough that continuing and improving the absorption of eu funds is the best way to boost the potential growth of our economy. an additional factor proven to boost the economy is the human capital. understanding the sources of economic growth and the role of education, topics that many papers will cover during this conference, is of paramount importance. 2 / 3 bis - central bankers'speeches distinguished audience, last but not least, during your social program, in the carpathian mountains - sinaia and at bran castle - you will discover or re - discover some parts of romania, a country with a rich history. allow me to add a few fun facts about sinaia, which is an eponym of mount sinai. by the end of the 17th century, a group of monks, led by mihail cantacuzino, a landlord of those times, went on a pilgrimage to palestine and the sinai peninsula, to saint ekaterina monastery. once returned, they established a monastery in the poorly inhabited, but abundantly beautiful area, called sinaia monastery. a century later, the first king of romania, carol i fell in love with the place and built pele castle, his summer residence, which you will visit. little by little, sinaia became popular among the members of the high society : they started building summer residences as well as hotels, villas. one can still admire there original buildings of the 19th and early 20th centuries. i hope you will have an enjoyable trip in the carpathians. to conclude, i am confident that the conference will be a successful event. i wish you all fruitful debates and a pleasant stay in romania! thank you! 3 / 3 bis - central bankers'speeches