ISLAMIC FINANCE REVITALISING ASIA AND MIDDLE EAST ECONOMIC TIES

KUALA LUMPUR, March 3 (Bernama) -- Islamic finance has revitalised the
economic ties and strengthened the financial linkages between Asia and
the Middle East, says Bank Negara Governor, Dr Zeti Akhtar Aziz.

This emergence of new financial centres in Asia and the Middle East and
their increased integration has paved the foundation for a new "Silk Road" and
growth prospects, said the central bank governor.

"It has also opened up the prospects for developed economies to forge
stronger financial linkages with these dynamic growth regions of Asia and the
Middle East," she said at the inaugural Official Monetary and Financial
Institutions Forum (OMFIF) on Monday in Frankfurt, Germany.

The text of her speech at the forum was issued here Wednesday.

Islamic finance is well positioned to be a vehicle on the new Silk Road as
the enabling supporting infrastructure is already in place.

She said the required regulatory and legal frameworks for Islamic finance
have also been established, not only growing in a number of countries in Asia
and the Middle East, but also at the international level.

It was with the establishment of the prudential standard-setting body, the
IFSB (Islamic Financial Services Board) in 2002 based in Malaysia that efforts
to enforce common prudential standards have significantly progressed.

Efforts towards the harmonisation of Syariah interpretations and issues
concerning mutual recognition are also at an advanced stage, said Zeti.

To-date, Malaysia has a comprehensive and well-developed Islamic financial
system, including a vibrant banking and takaful sector.

The Islamic capital and money markets are also well developed and operate in
parallel with the conventional system, she said.

They are well-supported by comprehensive Syariah, legal and regulatory and
supervisory framework to ensure the soundness and stability of the system, she
said.

Malaysia has also invested in human capital development to ensure a deep
pool of talent and expertise to support the development of Islamic finance.

For this purpose, Malaysia established the International Centre of
Education in Islamic finance (INCEIF) and the International Shariah Research
Academy (ISRA) to support advanced education and research in Islamic finance,
she added.
-- BERNAMA