Islamic finance, which borrowed features such as products from conventional banks, can now return the favor by lending its set of principles for good governance and responsibility, the Raja Muda of Perak, Raja Dr Nazrin Shah said on Tuesday.
"To date, Islamic banks have borrowed from conventional finance in terms of products.But, I think, the time has come where the flow of information and knowledge can and should flow the other way as well," he said in his keynote address at the second day of the World Capital Markets Symposium, here.
He said Islamic finance could also help the global finance industry to be more aware of following the rules and curtailing excess as well as create an infrastructure of honesty, fairness and integrity.
"But, I also believe Islamic finance can offer much more than this," Raja Nazrin, who is also the financial ambassador for the Malaysia International Islamic Financial Centre, said.
"At its heart, Islamic finance is an ispiration towards good finance.As we have seen, good finance is about trust, and trust is a cornerstone of stability.
"Therefore, I believe that Islamic finance can help break the vicious cycle of boom and bust that has come to characterise global finance," he said.
Islamic finance is now a truly global market, participating across borders with a vast range of investment alternatives including sukuk, mutual funds, commodity funds, equity traded funds, real estate investment trusts, shariah compliant derivatives and hedge funds.
Recent developments also included the possibility of an Islamic bank in France, the publishing of a book on Islamic finance in Italian and shariah compliant real estate funds in Australia.
There is also news of expected sukuk issuances from the United Kingdom, Australia and Korea.
There have also been a diverse range of issuers of shariah compliant products including the World Bank, the Islamic Financial Centre, the German state of Anhalt-Saxony, Aston-Martin and Shell, which pioneered the sukuk.
"The world is interested and I believe Islamic finance to be up to the challenge," Raja Nazrin said, adding that the industry is growing with more demand seen from non-Muslim investors, not only in Malaysia but also abroad.
He stressed that one of the most important goals of the Islamic finance industry should be to integrate into the global financial system.
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