and concentrating risks instead. the list goes on. each of these plays a role but if we are to identify a common factor across these various causes it is this : that finance has become detached from economic realities. as we look to develop our financial system, we have to bear in mind that the basic role of finance is to allocate scarce capital to its most productive use. we earn a return only if the capital is deployed to eventually produce goods and services that are valued by the market. when the nexus between the mobilization of capital and the productive use of capital is broken, the returns cannot be sustained – the bubble must eventually burst, with painful consequences. in this crisis, both conventional and islamic financial markets have been affected, but the restrictions on the use of leverage and speculation has put islamic finance in a better stead. in the coming years, as the shariah principles of using capital to build productive capacity gain wider recognition, islamic finance will assume a more prominent role. estimates of global islamic finance assets today range from us $ 700 billion to us $ 1 trillion and one consultancy firm estimates this could potentially grow to us $ 1. 6 trillion by 2012. 4 countries in asia are using islamic finance to fund urban development and public infrastructure projects to meet the growing demands of their populations. the adb estimates that asian countries would need more than us $ 8 trillion of infrastructure investment between kawai and wignaraja, “ the asian " noodle bowl " : is it serious for business? ” asian development bank institute working paper series no. 136, april 2009. oliver wyman, “ the next chapter in islamic finance - higher rewards but higher risks ”, april 2009. 2010 and 2020. 5 international financial institutions such as the islamic development bank are active in funding worthwhile investment projects. the global sukuk market remains a relatively new asset class with much room to grow out. in 2007, asian currency - denominated sukuk outstanding grew by almost 50 % but the market contracted by only 1. 5 % to us $ 64. 3 billion at end - 2008. 6 around us $ 1. 3 billion in sovereign sukuk issuance will come from malaysia, indonesia and singapore in the first half of 2009, and more private sector issuers are expected to tap the sukuk market and to attract new investors and clients. in asset management, an industry report 7 estimates the number of high net worth individuals and their financial wealth in asia combined to be about the same

heng swee keat : the future of islamic financial services welcome address by mr heng swee keat, managing director of the monetary authority of singapore, at the 6th islamic financial services board summit, singapore, 7 may 2009. * * * president of the islamic development bank, h. e. dr. ahmad mohamed ali al - madani ifsb council chairman and governor of the saudi arabian monetary agency, h. e. dr. muhammad al - jasser, ifsb governors, secretary - general prof rifaat ahmed abdel karim, ambassadors, honoured guests welcome i extend a very warm welcome to all our guests, especially those from overseas. as an islamic financial services board ( ifsb ) member, mas is honoured to host this 6th ifsb summit. this is ifsb ’ s first summit in east asia, and the strong interest shown by participants here is a testament to the growing opportunities for islamic finance and economic cooperation in our region. i very much appreciate the support of fellow governors and ifsb board members. a special thanks to all our panel chairmen and speakers, and to professor rifaat and the ifsb secretariat for organising this so well. we meet at a most challenging time. the imf and the world bank have forecast the global economy to contract for the first time since world war two. the economies of asia, like the rest of the world, have slowed significantly. so have all forms of financial services, including islamic finance. while actions taken by governments and financial authorities have helped to stem the sharp deterioration, the road to full economic recovery is likely to be bumpy. while the crisis is painful, there are several silver linings. this summit, with its theme of “ the future of islamic financial services ” provides a timely opportunity for us to reflect on the shortcomings in economic and financial models, and in our supervisory approaches. by drawing the right lessons, we can build the foundation for a better future. allow me to share some reflections on the future shape of economic linkages and financial services, as well as the supervisory approach. economic linkages first, the crisis shows that while the idea of the “ de - coupling ” of asian economies from the rest of the world was premature, the structural trend of a dynamic asia remains. i should clarify that in this speech, my reference to asia includes the middle east. even for 2009, while the world bank has trimmed its growth forecasts for asia, 1 this remains the faster growing region