success of islamic finance by allocating resources in having a dedicated subsidiary to drive its islamic banking business forward. the establishment of the islamic subsidiary is a positive step forward in the aspiration of making malaysia as a leading and attractive integrated islamic financial hub. i wish hong leong islamic bank berhad every success in its endeavours. ladies and gentlemen, dengan lafaz bismillahirrahmanirrahim, saya dengan sukacitanya merasmikan pelancaran " hong leong islamic bank berhad ". terima kasih. 2 / 2

drawn a higher level of foreign participation in the islamic financial markets which has resulted in increased cross - border flows. this has not only contributed to enhancing international financial inter - linkages between economies but it has also contributed towards the more efficient allocation of financial resources across borders. islamic finance in 2008 and beyond remains positive despite the current challenging global financial environment. the viability and competitiveness of islamic finance is derived from several factors. it is from its ability to meet the changing demands of the economy, from its cost competitiveness and from being supported by a well developed legal, regulatory and supervisory framework. but more importantly, are the fundamental shariah requirements of islamic finance that support its viability and stability. shariah is the key pillar of islamic finance from which islamic finance derives its unique characteristics. the shariah injunctions require that islamic financial transactions be accompanied by an underlying productive activity. in islamic finance, there is always a close link between financial and productive flows. moreover, under the risk sharing principle required, islamic financial institutions will share the profit or the loss incurred by the entrepreneur. there is an explicit sharing of risk by the financier and the borrower. this arrangement will thus entail the appropriate due diligence and the integrating of the risks associated with the real investment activity into the financial transaction. in this arrangement, the real activity is expected to generate sufficient wealth to compensate for the risks. in contrast, conventional instruments generally separate such risks from the underlying assets. as a result, risk management and wealth creation may, at times, move in different or even opposite directions. conventional financial instruments also allow for the commoditisation of risks. this has led to its proliferation through multiple layers of leveraging and disproportionate distribution, in turn, which could result in higher systemic risks, thus, increasing the potential for instability in the financial system. in addition, transparency represents a basic tenet underlying all islamic financial transactions. there is an inherent obligation on islamic financial services providers to meet the appropriate standards of transparency. it is from the profit - sharing feature of islamic financial transactions that imposes a high level of disclosure in the financial contract. the accountabilities of the respective parties involved in the transaction are clearly defined in the contract. this transparency also provides a strong incentive for islamic financial institutions to appropriately manage risks. this disclosure allows the market to assign the appropriate risk premiums to the respective companies and thus the potential for the enhanced role of market discipline to take