rasheed mohammed al maraj : challenges for islamic finance keynote address by his excellency rasheed mohammed al maraj, governor of the central bank of bahrain, at the world islamic banking european summit, london, 8 july 2008. * * * your excellencies, ladies and gentlemen : good morning. it is a pleasure to be here at the inaugural world islamic banking european summit in london. as his excellency, shaikh mohammed, has already mentioned, bahrain has been home to the world islamic banking conference for the past fifteen years. throughout that time central bank of bahrain has been – and remains – a strong supporter of the wibc. we very much welcome this inaugural european summit, which we regard as yet a further indication that islamic finance is rapidly moving into the financial mainstream. there is no need for me to repeat the facts and figures about the stunning growth of islamic finance that shaikh mohammed has already referred to. let me say, however, that i strongly endorse his view that the islamic financial industry continues to offer enormous opportunities for both muslims and non - muslims alike. we at the cbb have a continuing commitment to facilitating the development of the islamic financial services industry. we issued the first sovereign sukuk in 2001. we were the first regulator in the world to issue a comprehensive set of prudential regulations tailored to the needs of islamic financial institutions. more recently, we have introduced an innovative approach to the application of basel ii, pillar 1 requirements to our islamic banks. we will continue to ensure that all financial institutions in bahrain adhere to the very highest international standards. where necessary we will play our part in adapting those standards to the needs of the islamic financial services industry. in developing this framework we are assisted by the presence in bahrain of a number of the leading standard setting bodies for the industry. these include aaoifi, the accounting and auditing organisation for islamic financial institutions and the iifm, the international islamic financial market, which is doing sterling work in developing standard contracts and associated documentation. building sound underpinnings, in the form of an appropriate framework of regulation, accounting and contract standardization, is a very important challenge. but it is by no means the only one that the industry must confront as the result of its success. i would like to take this opportunity to look at some of the other challenges that the industry currently faces as it moves into the financial mainstream. a long - standing issue relates to the multiplicity of shari ’ a boards

of truth in those words. wherever things hinge, in particular, on asking the right questions, in the world of research for example, computers are – as yet – just a tool. they cannot replace humans in those areas. but digitalisation is shaking things up. we will wait with bated breath to see what computers and artificial intelligence can do in the future. a newspaper recently ran a story about the swiss bank ubs having created a virtual clone of its chief economist. the idea is for his digital likeness to advise wealthy clients on their investments in future. evidently, we economists are not immune to being replaced by computers either. thank you for your attention. 1 krugman, p. r., the age of diminished expectations : u. s. economic policy in the 1990s, mit press ( 4th edition, 1999 ), p. 11 ; 1st edition washington post company, 1990. 2 solow, r. m., we ’ d better watch out, new york times book review, 12 july 1987, p. 36. 3 see gordon r. j. ( 2016 ), the rise and fall of american growth : the u. s. standard of living since the civil war, princeton university press. 4 see brynjolfsson, e. and a. mcafee ( 2014 ), the second machine age : work, progress, and prosperity in a time of brilliant technologies, w. w. norton & company. 7 / 8 bis central bankers'speeches 5 oecd ( 2018 ), oecd economic reports : germany 2018, oecd publishing. 6 see arntz, m., t. gregory and u. zierahn ( 2016 ), the risk of automation for jobs in oecd countries : a comparative analysis, oecd social, employment and migration working papers no 189, oecd publishing. 7 author not named ( 2010 ), 175 jahre eisenbahn in deutschland oder : als die eisenbahn ins konigreich hannover kam, takt. 8 federal ministry of education and research ( 2016 ), educational campaign for the digital knowledge society. 9 see bos, w., b. eickelmann, j. gerick, f. goldhammer, h. schaumburg, k. schwippert, m. senkbeil, r. schulz - zander and h. wendt ( eds., 2014 ), icils