Zeti Akhtar Aziz: Raising the bar for the next phase of growth and development – sustaining transformative momentum Welcoming address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 10th IFSB (Islamic Financial Services Board) Summit 2013 “The future of the Islamic financial services industry – resilience, stability and inclusive growth”, Sasana Kijang, Kuala Lumpur, 16 May 2013. *  *  *  It is a great pleasure to welcome you to this 10th IFSB Summit, on the “The Future of the Islamic Financial Services Industry: Resilience, Stability and Inclusive Growth”. Bank Negara Malaysia is most honored to host this year’s summit, which is held in conjunction with the 10th anniversary of the Islamic Financial Services Board (IFSB). It was here in Kuala Lumpur 10 years ago that we witnessed the momentous occasion of the IFSB inauguration, that was the culmination of international collaboration among the founding member countries with the support of several key international and multilateral institutions. Its landmark establishment in 2002 as the international prudential standard setting body for the Islamic finance marked a major milestone in the effort to strengthen the international infrastructure for the Islamic financial system, steering the path for its successful integration as a viable component of the global financial system.
A decade on, the work of the IFSB in ensuring a cohesive cross-border regulatory framework and the international best practices that are attuned to the intrinsic characteristics and peculiarities of Islamic financial intermediation, have served to underpin the development of a sound and stable Islamic financial system, ushering in a phase of rapid growth and greater internationalization of the industry. Indeed, 10 years since the founding of the IFSB have been a period of significance, during which the Islamic financial services industry has grown impressively with its landscape dramatically evolved. This growth acceleration has been accompanied by the widening of its geographical reach transcending its traditional borders in Muslim majority countries to the more established financial centres. In addition, Islamic finance has evolved as a comprehensive system of intermediation servicing all segments of society, including governments, businesses and households regardless of scale of businesses and income levels. In this decade, Islamic finance has also evolved from being domestic-centric to become increasingly internationalized, intermediating funds across borders and becoming a new vehicle that bridges economies and fostering closer financial linkages, particularly among emerging and developing markets. As a form of financial intermediation that is well anchored to serve the real economy, Islamic finance offers distinct potential to achieve the goals of inclusive growth and financial stability. Its foundations have been strengthened with the setting up of the IFSB and before that, the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), have taken the lead in setting the prudential and accounting standards for the industry.