attest to our commitment in pursuing well - rounded growth and development for the nation. today, islamic finance forms part of the overall financial services industry that has proven to be an instrumental engine for driving economic growth for our economy. let me now briefly recap the evolution of islamic finance in malaysia. our journey officially began with the establishment of the first islamic bank in 1983 and in the year that followed, the first takaful operator. we have never looked back since then to evolve a comprehensive domestic islamic financial system operating alongside the conventional financial system, comprising the islamic banking institutions, the takaful industry, the islamic money and capital markets. these respective components have been progressively liberalized over the years, allowing for more foreign presence in the market to become internationally more integrated. this has led to diversity in market players, and the increased competitive forces now provide the impetus for increased innovation in the market. the dynamism in the market has been supported by a robust regulatory and supervisory framework, reinforced by the legal and shariah framework, the payment and settlement systems. our shariah framework in particular is distinctively robust, through the consultative role of the shariah advisory council of bank negara malaysia and securities commission, complemented by the shariah board of individual islamic financial institutions. this strategy has served us well, as it had nurtured innovation whilst ensuring stability in the marketplace. collectively, the strategies that we had adopted have brought about significant progress on several fronts, in the areas of institutional structure, diversity of players, operational efficiency and the wide range of products and services. several global players have chosen malaysia as their regional base for islamic finance. our sukuk market in particular has come a long way since the issuance of the first global sovereign sukuk by malaysian government in 2002. today, it has evolved into the world ’ s largest islamic bond market, accounting for more than fifty percent of global sukuk issuances in the first half of 2010. it has attracted the participation of various foreign corporations, multinational corporations and multilateral agencies in raising funds and investing in issuances out of malaysia. in the latest development, japan ’ s biggest brokerage house has recently listed its first us dollar sukuk on bursa malaysia. the strength and competitiveness of our sukuk market in bridging and strengthening financial linkages thus best encapsulates malaysia ’ s evolving role as an important international gateway in islamic finance, particularly in linking the two

marzunisham omar : risk and opportunity – managing risk for development welcoming remarks by mr marzunisham omar, assistant governor of the central bank of malaysia, at the wb - bnm seminar on the world development report 2014 “ risk and opportunity : managing risk for development ”, kuala lumpur, 29 april 2014. * * * it is my pleasure to welcome you to sasana kijang this morning to the seminar on the world development report 2014, with the theme “ risk and opportunity : managing risk for development ”. reading through the report, i ’ m struck by two observations : • first, in the past 50 years, middle - income countries have been in recession 14 to 16 per cent of the time and low income countries, a staggering 27 per cent of the time. • second, from 1970 to 2011, there were 147 banking crises in 116 countries. so, while the world has, in the last 50 years, made significant progress in terms of economic development, poverty eradication and overall standard of living, the above observation begs the question of whether the global economy is also more prone to crises, highlighting the fragility of the economic system that is currently in place. this reinforces the need to have a proper framework to identify and manage risks, towards achieving a common shared goal of sustaining long - term development. almost six years after the collapse of lehman brothers, the world economy is still coping with the aftermath of the global financial crisis, notably the worst financial crisis in the last 70 years. of relevance is that excessive risk - taking behaviours featured prominently as a key factor contributing to the crisis. in addition, what makes the global financial crisis different is the extent of the economic and financial inter - linkages within and across borders, which explains the far - reaching impact of the crisis. while the greater interconnectedness of economies and financial systems has brought about opportunities, it has also resulted in greater risks. the global financial crisis has resulted in the re - assessment of how policymakers view the achievement of macroeconomic and financial stability. there is a growing recognition that emerging risks to macroeconomic and financial stability have to be identified and managed in a more holistic and effective manner. as the economy and financial system grow in complexity, policymakers have to strengthen the understanding of the macroeconomic and financial inter - linkages in order to be able to effectively assess the implications of any potential risk on the economy. before the global financial crisis, the predominant view was that unfettered