financial stability in islamic financial system. the ifsf would also be a platform for the islamic financial system to interface with the conventional system via the financial stability board to facilitate the common objective of achieving global financial stability. to enhance the efficiency of the islamic financial institutions, a solution is currently being developed to facilitate liquidity management at both national and international level. a liquidity management task force was established by the ifsb and the idb to develop this solution. this task force is expected to make key announcements later this year to facilitate cross border liquidity flows for efficient resource utilisation by islamic financial institutions. islamic finance has come a long way and is set to continue its trajectory upwards and onwards. an important aspect of the recent developments to strengthen islamic financial services industry is that this is being undertaken during the stable and good times. this will position islamic finance to deal with future challenges. a clear indication of that is the growing relevance and importance of the sukuk market. this event in kuala lumpur is commemorating the talent, expertise and the successes of the islamic financial community.

zeti akhtar aziz : the global islamic financial market today – challenges and way forward luncheon address by dr zeti akhtar aziz, governor of the central bank of malaysia, at the annual “ the asset triple a awards for islamic finance ”, kuala lumpur, 6 july 2010. * * * it is my great pleasure to be here this afternoon on this occasion of the annual “ the asset triple a awards for islamic finance ” by the asset publishing and research, to deliver some remarks on the key challenges and way forward for islamic finance in the international financial system. islamic finance has experienced its most rapid pace of development in this decade demonstrating its competitiveness and resilience as a form of financial intermediation. while the islamic assets are now more than us $ 1 trillion, it is estimated that the global islamic finance industry will reach the us $ 2 trillion mark in the next three to five years. the sukuk market has become the most significant and vibrant segment in the international islamic financial system. issuers are seeing the sukuk instrument as an attractive alternative means for raising capital, whilst investors are increasingly seeing it as a new asset class in their investment universe. this has generated significant cross - border flows as funds are raised from beyond domestic financial markets and as investors diversify their portfolios into assets from other jurisdictions. the sukuk market currently stands at almost us $ 130 billion, with a growth rate of about 40 percent annually. despite a challenging environment, new issuance of sukuk in the global sukuk market rose by 43 percent to us $ 20 billion in 2009. however, developments in europe resulted in a more cautious market and the global sukuk issuance declined by about 20 percent in the first half of this year. in the coming period, this trend is expected to improve as the governments in asia and the middle east have already initiated the raising of funds for the implementation of infrastructure development and investment projects. this extensive interest in islamic finance from different parts of the world is driving the international dimension of islamic finance. this has contributed to the strengthening of financial and economic linkages between the more established financial centres of the western world and the newly emerging financial centres in asia and the middle east. this has thus contributed to the more efficient allocation of funds across borders from centres with surplus funds to regions with investment opportunities. it has also allowed for more inclusive participation regardless of size and stage of development. islamic finance now provides the range of financial products and services to