An area that Islamic finance has a major potential role is in the reorientation towards achieving a more inclusive and sustainable growth – an important post-crisis development agenda. Serving the small and medium-size enterprises (SMEs) presents huge potential for Islamic financial institutions, particularly those with the capability to deploy innovative equity-based structures and alternative forms of financing, such as private equity and venture capital. Asia is also now becoming a primary force for the global Sukuk market, with 68% or USD120 billion of the total sukuk outstanding in 2011 originating from the region, thereby providing an important investor base for sukuk issuance from different parts of the world. Whilst Malaysia has evolved a vibrant sukuk market, more Asian countries have turned to the sukuk market for financing large-scale projects including for infrastructure development. Several countries in the region are currently reviewing their legislation and taxation to enable debut sukuk issuance. The Asian sukuk market has also been progressive in the innovation frontiers. There has also been a growing trend for multi-currency sukuk issuances. This provides greater prospects for tapping a wider pool of investors, including from the Middle East and Europe. In Malaysia and more recently, in Indonesia, Sukuk issuances have also aimed at retail investors. This is to take advantage of the high levels of surplus savings in Asia, whilst providing wider investment options to retail investors that have traditionally invested in bond funds and unit trusts.
Zeti Akhtar Aziz: Regulatory and governance for Islamic finance Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Brunei Darussalam Islamic Investment Summit 2013 “Regulatory and governance for Islamic finance”, Bandar Seri Begawan, Brunei, 19 June 2013. *  *  *  It is my great pleasure to be here in Brunei Darussalam to speak at this Islamic Investment Summit 2013. My remarks today will discuss the current landscape of Islamic finance in Asia in the context of the growing role of Asia in the global economy, and the important priorities for Islamic finance to strengthen its prospects for future growth and stability. Asia and the global economy The global economic landscape is now significantly evolving as it progresses towards a new more multi-polar world. This is being shaped by the increasing contribution of emerging economies to global economic growth, with some of the most vibrant and dynamic emerging economies being in the Asian region. In 2012, the Asian region contributed 56% to global growth. This advancement takes place at a time when the world economy continues to be significantly challenged by the lingering effects of the 2008 global financial crisis, with a sustainable economic recovery yet to be secured. Asia’s growth trajectory has been underpinned by several favorable fundamentals, which will continue to support its prospects for growth going forward. Asia is a highly diverse region in terms of its economic and demographic structure, market size, stage of development, and political systems.