In this dynamic environment, the scope of the Islamic finance business has expanded from simple retail and trade financing to include private equity, project finance, sukuk origination and issuance, as well as fund and wealth management products. Today, the total global size of the Islamic financial assets has surpassed more than 1 trillion US dollars. There are now more than 600 Islamic financial institutions operating in 75 countries. The vision for the Islamic financial system in Malaysia was articulated in our first Financial Sector Masterplan that was launched in the year 2001, in which the plans for building the foundations for the Islamic financial system were outlined. This included strengthening and diversifying the financial intermediaries in the financial system, building and developing the financial markets, and enhancing the regulatory supervisory, Shariah and legal framework. Ten years later, in 2011, a new Financial Sector Blueprint was launched, charting the path for Islamic finance to transition to become increasingly internationalised, and thus to become more integrated into the mainstream of the global financial system. Whilst Islamic finance has all the ingredients and the potential to meet the needs of the global economy, the channelling of funds to productive activities in Islamic finance today is still largely being carried out through non-participatory contracts, that includes the mark-up sale (Murabahah) and the lease-based (ijarah) structures, which continue to remain essential to cater for financing trade and the purchase of assets. Such contracts are similar to lending instruments which expose the Islamic financial institutions mostly to credit risk elements.
by opposing techno‐utopians and techno‐pessimists, or proponents of “degrowth” to proponents of “green growth”) is not constructive Lastly, given the well‐known limitations of GDP as a measure of well‐being, it is also important to bear in mind that the definition of growth itself is bound to evolve in the future. For instance, as recently stressed by Professor Nicholas Stern and co‐authors in an IMF working paper,17 we should move from a “flow‐ 16  See Keyßer, L.T., Lenzen, M. (2021). 1.5 °C degrowth scenarios suggest the need for new mitigation pathways. Nature Communications 12, 2676. https://doi.org/10.1038/s41467‐021‐22884‐9 17 Bhattacharya, A., Ivanyna, M., Oman, W., Stern, N. (2021). Climate Action to Unlock the Inclusive Growth Story of the 21st Century. IMF Working Paper 21/147. 7  centred focus on GDP” to a “stock‐centred focus on a broad definition of capital”; “the conceptual framework used by policymakers must treat planetary boundaries – notably climate overshoot – as a hard constraint”. They also propose to establish an annual carbon budget at the national level which would be binding. In short, if we are to hold a serious discussion about what an ecological transition means for central banks, including the impact it will have on output and other key macroeconomic variables, we need to be able to engage in a responsible and scientific manner on these difficult questions, rather than sweeping them under the rug.