Essentially, this extends the production possibility frontiers to create new areas of growth. The participation of a wider pool of investors also enables better risk sharing and consequently, increases the viability of projects as well as the returns to the investment. New value is also created is in mutually beneficial collaborations, such as in downstream energy activities. Products resulting from hybrid ideas are also evident in innovations in several areas, including in Islamic finance, with the early global sukuks being issued from Asia and the Middle East economies. 4  Refers to IMF data  5  Refers to individuals with at least USD1 million in financial assets. Sourced from Merrill Lynch - Capgemini World Wealth Report 2006  2  BIS Review 31/2007  Islamic Finance: strengthening the financial linkages between Asia and the Middle East Ladies and Gentlemen, Islamic finance has demonstrated its viability and competitiveness in a more liberalised and globalised financial environment and has become important in strengthening the linkages between the two regions. While the sizeable Muslim populations in both regions have been attracted to the unique features of Islamic finance, it has also attracted interest and participation from non-Muslims within these regions. At present, there are more than 100 6 Islamic banks in both regions, while Islamic financial transactions involving sovereigns and corporations have amounted to USD 35 billion during the period 2004 and 2006 7 . Several factors have supported this trend.
There are several key benefits of issuing the Islamic Monetary Notes under this structure. It provides Islamic financial institutions an additional instrument to manage liquidity risk on a short-term basis. It is also a financial instrument whose structure has been widely used for retail banking and syndication products in the Middle East. Finally, it provides an opportunity for new investors to invest in Islamic financial papers in the Malaysian market, thus diversifying the investor base. As part of the initiative to be linked to the global Islamic financial markets, this instrument will be promoted to the international financial market. Islamic Derivative Master Agreement (IDMA) Recognising the importance to develop Islamic hedging products for Islamic financial market to mitigate investment risks, Malaysia has introduced the first global Islamic Derivative master agreement to document Islamic derivative transactions. The effort is initiated by Bank Negara Malaysia and driven by the financial industry via the Persatuan Pasaran Kewangan Malaysia. The implementation of the agreement is expected to improve the risk management practices, balance sheet management, increase fund mobilisation efficiency and enhance their investment banking capability of the Islamic banking institutions. With the introduction of IDMA, the rights and obligations of contracting parties are clearly stated, thus creating an environment that is more transparent. As IDMA also incorporates best practices in market conduct, this document serves as an important catalyst for the future linkages between financial markets that offer Islamic financial market instruments.