INTEGRATION OF ISLAMIC FINANCE SHOULD BE FACILITATED ACROSS JURISDICTIONS

The international integration of Islamic finance should be facilitated by the mutual recognition of financial standards and products across jurisdictions, said Bank Negara Governor, Tan Sri Dr Zeti Akhtar Aziz today. "It is one of the most important factors in sustaining the internationalisation of that sector," she said in her address at the Malaysia-United Kingdom (UK) Islamic Finance Forum held here today.

She said that there had already been the progressive convergence of Shariah views and rulings, and the mutual recognition of financial standards and products across jurisdictions.

"As this continues to occur, it would be a major driver towards greater international financial integration," she added.

"This convergence and harmonisation is taking place with greater engagement among the regulators, practitioners and scholars in Islamic finance across jurisdictions," she highlighted.

The Lord Mayor of the City of London, Alderman Ian Luder also attended the one-day forum, organised in collaboration with the Commonwealth Business Council.

Luder was leading a business delegation representing UK-based financial and professional services firms to Malaysia, for three days from Tuesday.

According to Zeti, the UK and Malaysia had one of the oldest relationships which has been dynamic while evolving in the rapidly changing international environment.

"The bilateral trade in goods between both Malaysia and the UK only accounts for 1.4 percent of our total trade. But Malaysia's bilateral trade in services with Britain accounted for 6.3 percent of our trade in services in 2008.

"While the balance of trade is in our favour, the balance in the services account is in favour of the UK, amounting to RM2.3 billion," Zeti said.

Meanwhile, Zeti said Islamic financial assets comprised 17 percent of the total assets of the banking system in Malaysia and the daily average volume transacted in the Islamic money market was RM6 billion.

The sukuk market, which has been expanding at an average annual rate of 22 percent, now accounts for more than 50 percent of the Malaysian bond market, she stated.

Link: http://malaysia.news.yahoo.com/bnm/20090708/tbs-zeti-islamic-ceeeaba.html