of the core underpinnings of islamic finance which has already garnered significance in many parts of the world. the central tenet in islamic finance requires that financial transactions be supported by genuine economic activity, reinforcing the link between finance and value creation and aligning financial innovation to productive economic activity. additionally, the emphasis on risk - sharing in islamic finance strengthens the incentives for participants to screen and monitor transactions for economic viability and risks, and to institute the governance process. in malaysia, our efforts to widen the reach of such value - adding and value - based finance include the development of a multi - bank platform to match funds from potential investors with entrepreneurial ventures in the real sector. thirdly, the efforts to strengthen the supply and demand of value - adding and valuebased finance would contribute significantly towards re - anchoring the global financial system to the real economy. on the supply side, the focus on professionalism, ethics and the quality of talent would contribute to drive for positive changes in the financial services industry. in malaysia, we have initiated the financial services professional board, launched in 2014, comprising of an independent group of eminent experts from around the world is currently refining a voluntary code of ethics that may be internationally applicable across the financial services industry. a meaningful change in the culture of financial institutions requires a true commitment from the industry. a display of such commitment through the measurement and disclosure of a financial institution ’ s non - financial performance, such as its impact in social, environmental and governance metrics, can be a powerful tool for change. in malaysia, such a proposal is being developed for islamic financial institutions to disclose their corporate value - intent, a performance measure their commitment to value creation. greater consumer activism and bis central bankers ’ speeches demands for more consumer - focused corporate information reflects the increased demand by consumers for institutions to account for their behaviour and values. in terms of the demand for ethical and responsible finance, greater awareness among consumers and investors on the availability and viability of such positive finance is also needed, including among governments, corporates and the retail market. education, engagement, incentives and the alignment of legal and regulatory frameworks on the utilisation of such finance will be important to achieve this. finally, is the need to foster strong leadership at the global level that can have an advocacy and facilitative role in resolving barriers and bringing together different stakeholders to work together in a coordinated and cohesive manner. the responsible finance institute, initiated as a think tank based

zeti akhtar aziz : building financial systems for sustainable development speech by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the global ethical finance forum “ building financial systems for sustainable development ”, edinburgh, 1 september 2015. * * * it is my distinct pleasure to speak at the global ethical finance forum here in edinburgh. i would like to warmly thank the scottish government and the middle east global advisors for the kind invitation for me to speak at this forum. it is a privilege to be here in the company of this distinguished and diverse gathering of professionals from the various fields that are prioritising ethical finance for sustainable development. the discussion on ethical finance that supports sustainable development is timely. in this recent decade, we have had to deal with a financial crisis of unprecedented global proportions that has stemmed in part from the prevalent ethics and culture in the financial services industry. in this period, we have also witnessed significant occurrences of misbehaviour and ethical lapses surface in the financial services profession, including the manipulation of reference rates and deliberate compliance failures. since the global financial crisis, we have now had several years to reflect on these weaknesses and to institute the much - needed reforms that have prioritised resilience and stability. having made important progress on this front, it is timely to direct our attention to developing more enduring solutions that will place the financial sector firmly back in the service of society. this calls for a closer examination of the fundamental character of modern finance – where ethical and responsible finance that is strongly anchored to the real economy has a more significant role. my remarks today will begin with some observations on the evolution of financial systems and the trends that have increased the vulnerability to financial crises, highlighting some of the key issues that have contributed to the breakdown of financial systems. finally, i would like to take this opportunity to discuss some possibilities for the future of finance. financial systems, then and now the development of finance has historically been a positive and inseparable part of world economic growth and prosperity. there is a large body of research that points to the significant benefits of financial development, recognising the economic value in financial intermediation that mobilises savings, catalyses investment, enables an efficient allocation of resources, reduces information asymmetries, and facilitates the management of risks. the transformative role of finance in economic progress is evident throughout history. the intrinsic power of finance essentially lies in its linkage