conventional banks moved assets to structured investment vehicles ( sivs ) or “ conduits ” which did not form part of their normal financial reporting or disclosures. because these entities were regarded as off - balance sheet they were opaque both to regulators and to the counterparties of the banks that sponsored them. similarly, as we now know, the risk disclosures of various structured financial instruments were inadequate to permit purchasers of those instruments to perform a proper assessment of the risk / reward trade - off. many investors purchased assets which they believed to have a very different risk profile than turned out to be the case. again, there are parallels with islamic finance. the use of off - balance sheet special purpose vehicles has been a feature of the financing model of many islamic banks. we need to consider whether this gives rise to the same problem of a lack of transparency that arose with off - balance sheet sivs. similarly, accounting standards for islamic finance need to keep pace with financial innovation. there is a lesson in the failure of the accounting of conventional instruments to keep pace with industry developments. as the g20 leaders recognised in their recent summit meeting, enhanced accounting and disclosure standards must be a key component of the response to the financial crisis. they have commissioned the international standard setting bodies, such as the international financial standards board ( ifsb ) and from the us financial accounting standards board ( fasb ), to review the lessons of the crisis and to amend their accounting and disclosure frameworks accordingly. aaoifi will have important work to do in ensuring that the framework of transparency and disclosure of islamic financial institutions will match the enhanced standards that are likely to be forthcoming for conventional finance. i encourage aaoifi to follow these developments closely and to work on producing revised and new accounting standards to match changes in the field of conventional finance. the changes that are likely to result from the global financial crisis, including in the accounting and auditing profession, will provide the background to the professional careers of the students whose success we have gathered to recognise today. i would like to offer my congratulations to these students who have successfully completed the “ certified shari ’ a adviser and auditor ”, and “ certified islamic professional accountant ” programmes. both are challenging courses of study. to complete them successfully has required hard work and commitment. it is an achievement to be proud of, and one that i am sure will serve you in good stead as you further develop your professional careers. let me conclude by wishing the graduating students all the best in

crisis in part because the shari ’ a prohibits the excess leverage and speculative financial activities that were at its root. they also take comfort from the fact that many participants in conventional finance, as well as regulators, and policymakers have begun to ask whether there are lessons to be learned from the principles of islamic finance which might help avoid future crises. recent events have certainly created a great opportunity for the islamic financial industry. at the same time, however, there is no room for complacency and if the industry is to make the most of the opportunity that has now arisen it will need to ensure that the lessons of the crisis are fully learned. some of these lessons are quite general and apply equally to conventional and to islamic finance. central bankers and regulators have learned that they must pay more attention to risks that are common throughout an entire sector of the industry. these risks might not be immediately apparent from reviewing the balance sheet or financial statements of an individual institution. an example of such a risk is when all banks assume that they can exit their speculative positions at the same time. this requires them to assume that financial markets will always remain as liquid as they are in normal times. but if every financial institution is operating on the same assumption, then the point at which everyone tries to rush to the exit will be the point at which financial markets cease to function. there will be only sellers and no buyers. this is what happened in conventional finance when banks invested in structured financial instruments like cdos and clos which they then found they couldn ’ t sell at any price. now some people might believe that because islamic financial institutions cannot invest in cdos and clos, they must be immune to this problem. but think about the exposure of many islamic banks to the real estate market. it might be a reasonable assumption for an individual institution that it could exit profitably a property development that it is funding. but when many other institutions are making similar assumptions about the projects they are funding, the industry as a whole may find it difficult to exit its investments without substantial losses or within a reasonable time - frame. a further lesson of the crisis is specific to the work of the accounting standard setters and thus to aaoifi. this lesson relates to the importance of disclosure and transparency. good disclosures ensure that risks can be clearly identified and that market counterparties are able to form a considered view of the value of financial instruments and investments. the financial crisis involved multiple failures of disclosure and transparency. for example,