our competitive advantage in islamic financial markets and move beyond our previous focus of advisory and promoting primary market issuances and move up to build an end - to - end value chain capability – where we should also focus on secondary market trading, settlement and custody services. but this aspiration of ours could only be achieved if there is a collaborative effort between the industry and the authorities. one such platform is the malaysia international islamic financial centre ( mifc ) initiative that comprises a community network of the country ’ s financial and market regulators, including bank negara malaysia ( central bank of malaysia ), securities commission malaysia, labuan financial services authority and bursa malaysia ( kuala lumpur stock exchange ) ; government ministries and agencies together with industry participation from the banking, takaful, capital market institutions, human capital development institutions and professional services companies which are participating and working collaboratively in the field of islamic finance. the creation of international islamic liquidity management corporation ( iilm ) recently was the outcome of the high level taskforce on liquidity management that was formed by the islamic financial services board ( ifsb ). it is a collaborative effort to develop a liquidity framework that can provide widely acceptable liquidity solutions to islamic financial institutions, to promote better liquidity management. iilm will be an issuer of shariah compliant financial instruments that are highly liquid and tradable in the secondary financial market. this is an important infrastructure capacity building since it would expand the scope of business for islamic finance globally and was achieved through collaborative effort. another initiative is the creation of a sukuk investment fund – foreign currency funds to be disbursed to selected islamic fund management companies ( ifmcs ) to invest primarily in foreign currency sukuk issued out of malaysia. the fund would support the proliferation on the buy side for the issuance of sukuk out of malaysia, besides providing a platform for the islamic fund management industry, including start - ups to build their track record in managing foreign currencies fund denominated. complementary to this initiative is the creation of a malaysian - based sukuk index for foreign currency and also an extension of our domestic settlement capabilities to include foreign currency securities. this is the moment when we need the cooperation from the private sector in support of government ’ s measures to generate business and to stimulate the economic growth. there are enormous opportunities for the industry to benefit from these initiatives. the strengthening and the transformation of the financial sector contributed by financial deregulation, opening of

mohammad bin ibrahim : the development of the malaysian financial markets opening remarks by mr mohammad bin ibrahim, deputy governor of the central bank of malaysia, at the persatuan pasaran kewangan malaysia ( ppkm ) gala dinner, kuala lumpur, 12 november 2010. * * * allow me to express my thank you to the organizer, persatuan pasaran kewangan malaysia, in short ppkm, for inviting me to tonight ’ s 2010 ppkm gala dinner. it gives me great pleasure to deliver the opening remarks. my address will specifically focus on the development of the malaysian financial markets. the future of the financial markets is of interest to us all here today. i am pleased to note the significant progress that the persatuan has achieved since its establishment in 1973. it has contributed significantly in representing the interest of the dealer community and in providing feedback and developmental ideas on issues relating to the development of the malaysian financial markets. ppkm also plays an important role as a bridge to the relevant regulatory authorities. the relationship had been productive to the overall development of our financial market. indeed, through this cooperation, the malaysian financial markets have come a long way and have grown steadily in size, breadth and depth over the years. this has received acknowledgement in the recent world economic forum ’ s overall financial development index ( the index refers to three broad areas : factors, policies and institutions, financial intermediation and financial access ), where malaysia is now ranked 17th, up 5 notches from 22nd place previously. this is a commendable achievement but we still have a lot to do. as malaysia moves forward with the economic transformation programme, the demands for the financial sector as enabler, catalyst and driver of growth will increase. the financial sector as a whole is expected to grow in size, from 4. 6 times gdp now to 5 – 6 times gdp by 2020. the significance of financial markets, relative to funds raised through financial intermediaries such as banks, will continue to rise. in meeting the needs of the new high value added economy, our financial sector needs to be developed further and innovative in its approach in order to facilitate higher levels of domestic and international trade and investments. one such innovative approach is the development of a comprehensive and vibrant islamic financial industry. it is our aspiration to transform malaysia as the islamic financial hub. crucial to the transformation is intensifying of our efforts to further develop the foreign currency markets in malaysia. in particular, we should seek to capitalise on