##ness and stability, as it resides within a financial trajectory underpinned by the forces of shari'ah injunctions. these shari'ah injunctions interweave islamic financial transactions with genuine productive activities and prohibit involvement in illegal and unethical activities. this intrinsic principle of governance contributes towards insulating the islamic financial system from the potential risks of financial stress triggered by excessive leverage and speculative financial activities. indeed, the islamic financial system derives its strength and stability from its faculty to uphold shari'ah principles. this demands the internalization of shari'ah principles in islamic financial transactions, in its form, spirit and substance. this epitomizes the objectives of the shari'ah in promoting economic and social justice. to achieve this objective, the islamic financial regulatory and supervisory regime must always ensure shari'ah compliance. integral to this process is the success in achieving " unity in diversity " of the interpretations of shari'ah injunctions in the realm of finance. in this regard, the islamic financial services board aims to strengthen the current initiatives to achieve a greater degree of convergence and harmonization. ladies and gentlemen : a greater understanding of islamic banking and finance on the international front would contribute towards our efforts to reinforce the on - going international initiatives towards fostering greater global financial stability. in this regard, the participation of other financial supervisory and regulatory authorities, and other international standard setting organizations would facilitate this process to achieve our shared interest of preserving the soundness and stability of the islamic financial system. ladies and gentlemen : it has been said that islamic banking and finance is a " mirror of the sea " for until and unless we have the courage to explore its depth, we would never be able to uncover the treasures that reside within. islamic banking as a new sphere of finance promises vast opportunities and benefits for all. its integration into the global financial system will contribute towards achieving our shared aspirations for financial stability to ensure balanced growth in the global economy.

of the crisis have made a crucial contribution to restoring financial stability. given the depressed economic conditions and various challenges that have emerged, we, at the bank of mauritius, are expected not to lose sight of financial stability while formulating policies ; it ’ s a dragon that we cannot afford to leave out of our policy calculations. soundness and robustness of banks as well as financial stability are not a novel policy concern for mauritius. mauritius is one of the rare countries in the free world that has known free banking in the 17th and 19th centuries. bank failures were as common a feature in mauritius as in the us and elsewhere. a few years after independence in 1968, more specifically after the breakdown of the bretton woods system in september 1971 that had rendered the international monetary system unstable, the bank established a division that eventually evolved into what is known today as the bank supervision department. its objective was and still is to regulate banks and ensure financial stability. the bank has hitherto not lost sight of the critical importance of financial stability to the economy. we have a bank - centred financial system. total assets of our financial system are currently estimated at around 385 per cent of gdp. the banking sector alone accounts for around 300 per cent of gdp which goes to say that banking accounts for 80 per cent of the total assets of our financial system. total assets of the most domestic systemically important bank in the country are nearly 70 per cent. the assets of the insurance sector are equivalent to 33 per cent of gdp while those of the pension sector stand at 25 per cent of gdp. the non - bank deposit taking sector, inclusive of leasing companies and finance companies, have assets equivalent to 16 per cent of gdp. these ratios suggest that the importance of banks in our financial system cannot be understated. if government ever had to bail out banks in order to protect the economy from collapsing, our debt - to - gdp would fly through the roof. it goes to say that regulation and supervision of banks is a function of the bank of mauritius that cannot be taken lightly and politicians should stay out of the regulatory and supervisory arena. in particular, licensing of financial institutions should be free of political influence in the first place. however effective and robust the regulatory and supervisory framework in place, banks do fail. and they fail due to a variety of reasons. there is no magic elixir that grants immortality to banks. in the last 46 years, the bank of mauritius revoked the banking licences of five banks. the funeral list