learnt from the global financial crisis. the building blocks include first, ensuring the effective implementation of prudential standards ; second, the development of robust liquidity management infrastructure ; third, the establishment of strong financial safety net ; fourth, having in place an effective crisis management and resolution frameworks ; fifth, further strengthening of the accounting, auditing and disclosure standards ; sixth, putting in place an effective macro prudential surveillance ; seventh, having credible credit rating institutions and processes ; and eighth ; enhancing close international cooperation and coordination among countries, which includes capacity building and talent development. the report further recommends the establishment of an islamic financial stability forum ( ifsf ) based at the ifsb as a strategic platform for productive dialogues to promote financial stability in the islamic financial system. the ifsf would be an important institutional arrangement for the islamic financial system to interface with the conventional system via the financial stability board. with the growing significance of islamic finance in the international financial system, this is critical to constructive dialogue and promotes a comprehensive approach in efforts to strengthen global financial stability. concluding remarks let me conclude. the recent international financial crisis has been a defining event in economic history and its effects will likely cast a long shadow over policymaking in the coming years. as we enter into a gradual stabilisation and recovery period, policymakers are now faced with the challenge to find an enduring solution to ensure the stability of financial systems. islamic finance has a role in shaping the future of the global financial system and reinforcing ethical and moral values that are inherent in islamic finance principles and fundamental towards promoting the stability of the global financial system. ongoing efforts to further strengthen the resilience of islamic financial industry would enhance the prospects for global growth and the potential of islamic finance to contribute towards global financial stability.

1997 / 98 financial crisis. what we have learnt is that there are no short cuts in reforming a broken system. we also learnt that we should always have an open mind in looking at probable solutions. just like what a good doctor would prescribe, some time, administering bitter medicines are the only way to go. the international community is now intensifying its efforts to strengthen the international financial system, with the aim to build the foundations for a stronger and more inclusive global economy. in this post - crisis era, the role and relevance of islamic finance have gained increasing attention. islamic finance emphasises on achieving socio - economic goals in congruence with the shariah objectives, thus reinforcing the fundamental disciplines that are essential to preserve financial stability. overview of islamic finance and linkages between islamic finance and conventional financial system in this last decade, islamic finance has evolved to become a complete and competitive form of financial intermediation that serves both muslim and non - muslims consumers and businesses. the islamic finance industry is currently worth more than us $ 1 trillion and growing at a rate of 15 – 20 percent annually, with anticipation of further growth to reach us $ 2 trillion in the next 3 to 5 years, as more countries around the world seek to further develop islamic finance within their jurisdictions. its appeal as a competitive and innovative form of intermediation has led a number of established conventional players to enter the islamic finance industry, thus widening the diversity of islamic financial institutions and its product range. exceptional growth in islamic finance is registered not solely in the muslim world, but now spans across the western world and the asia pacific region where the growth is driven by commercial and business considerations. the emerging interest in islamic finance includes countries such as australia, germany, united kingdom, france, italy, luxembourg, hong kong, japan, korea and china, with initiatives in introducing islamic finance in their financial systems. such developments would create a dynamic and competitive environment for the global islamic finance industry. the development of the islamic financial system is guided by shariah principles that form the very foundation which contributes to its overall stability and resilience. shariah embodies islamic law with rules and regulations derived from the quran and sunnah, or practices of prophet muhammad. the intrinsic value propositions embedded in islamic finance are universal and subscribe to the values of ethical finance and socially responsible investment. in essence, it is a requirement for islamic financial transactions to be supported by an underlying economic activity, with business and trade activities