KUALA LUMPUR: Innovations in Islamic financial solutions will need to take into account the higher regulatory expectations for more transparency, as well as the effective management of risks and capital, said Bank Negara govenorTan Sri Dr Zeti Akhtar Aziz.
She also noted that while Islamic finance had benefited from a well developed, more competitive and well-regulated eco-system, it needed to build on and reinforce the “solid foundations that have been achieved in this decade”.
“As the industry transitions into a new era of growth and development, the competitive financial landscape is being redrawn by the evolving international regulatory reforms, changing operating models, rising consumer expectations and increased competition,” she said.
“In this more challenging environment, the success of sustaining the momentum of Islamic finance as a transformative agent for the economy, will hinge on the ability to keep raising the bar in the pursuit of an effective functioning and sound financial system,” she told an international audience at the Islamic Financial Services Board (IFSB) Summit 2013, The Future of the Islamic Financial Services Industry: Resilience, Stability and Inclusive Growth, yesterday.
The event was also held in conjunction with the IFSB's 10th anniversary.
The summit sessions allowed industry players to network and discuss market prospects for Islamic finance, identify measures needed to connect Islamic financial institutions and market segments.
Zeti also spoke on the severe damage caused by the global financial crisis and the ensuing economic downturns, and how enduring recovery would “demand a global policy response that would bring about a new economic plan”.
She alluded to the need for more responsible financial practices from the financial sector, which included the commitment to achieve socio-economic goals.
“Much has been achieved, both in terms of the role and contribution of the IFSB, and the advancement made by Islamic finance in this recent decade.
“Our commitment and strategies to keep raising the bar on Islamic finance will enhance its prospect to contribute to achieving our shared vision of inclusive growth in an environment of financial stability,” she added.
Qatar Central Bank govenor and chairman of the IFSB 2013 Sheikh Abdulla Saoud Al-Thani said the Islamic finance industry grew an estimated 15% annually.
“The IFSB remained firm in ensuring that challenges arising out of this sharp growth did not cause problems and that the development of Islamic finance before the involvement of IFSB was mainly prevented by the fact that Islamic financial concepts may have been unfamiliar to regulators and the business community,” he said.
Zeti also spoke on the severe damage caused by the global financial crisis and the ensuing economic downturns, and how enduring recovery would “demand a global policy response that would bring about a new economic plan”.
(The Star Online / 17 May 2013)
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