As structured programs on Anti-Money Laundering and Counter Financing of Terrorism activities are relatively new especially among many developing member countries, it remains a challenge for the financial industry and regulators alike to formulate adequate measures and mechanisms to counter these perpetrators. In this regard, compliance with the standards set by the Financial Action Task Force on Money Laundering help deter the Asia Pacific region from being targeted as a regional centre for money laundering and terrorism financing. In this regard, I am especially pleased to share with you that Malaysia has been ranked among the top 10 countries in terms of AML/CFT compliance in the recent Mutual Evaluation Report 2007 assessment exercise. Let me now turn to a subject close to us here in Malaysia, that is, Islamic insurance or better known as takaful. In recent years, takaful has grown significantly as the Islamic alternative to conventional insurance and has evolved from being a domestic operations to becoming a thriving global business. The global takaful market is expected to grow between 15 and 20 per cent per annum. Nevertheless, the market penetration level remains low, notably less than 5% in many Muslim countries and 6.8% here in Malaysia, thus providing significant market potential that remains untapped. Bank Negara Malaysia will continue to foster the continued growth of takaful business by providing a conducive business and regulatory environment. However, there is a clear need for the takaful industry to deliver innovative financial products and services, that can effectively compete with those offered by conventional insurers.
The National Authorities will conduct the exercise at the national level, on the basis of data requirements and centrally developed methodology, and may ask for the support of third parties if they deem it necessary. To ensure consistency in execution across banks and countries, quality assurance processes will be in place at every stage. It is in the interest of all that this exercise be rigorous and transparent, so as to fully restore confidence in the European banking sector. 4  BIS central bankers’ speeches  Conclusions We have in front of us a year “fully loaded” – to use the jargon we all use in connection with of the Regulatory Basel Framework. The European Union is trying to make a big step forward and we will need the intelligence and best cooperation of all for this great design to be carried out. Thanks again to the Official Monetary and Financial Institutions Forum and to his Chairman, David Marsh, and to all the participants. I wish all of our visitors a very good stay in Madrid. BIS central bankers’ speeches  5