ISLAMIC FINANCE ALSO DRAWS INTEREST FROM NON-MUSLIMS, SAYS BANK GOVERNOR

From Nor Baizura Basri

MANAMA, May 4 (Bernama) -- The sustained and largely uninterrupted expansion
of the global growth in Islamic finance has drawn significant international
interest, not only from Muslim countries but also from non-Muslim communities,
Bank Negara Malaysia (central Bank) Governor Dr Zeti Akhtar Aziz.

She said Islamic finance continued to demonstrate its resilience against the
background of the current challenging international financial environment.

"Financial centres such as London, France, Hong Kong and Singapore are
increasing their efforts to enhance the development of Islamic finance in their
financial centres," she said in a speech read out by Deputy Governor ohd
Razif Abd Kadir at the Malaysia Showcase Dinner in this Bahrain capital Monday.

The showcase was held in conjunction with the Seventh Islamic Financial
Services Board (IFSB) Summit which starts Wednesday.

Zeti said the internationalisation of Islamic finance had also observed
the strengthening of ties between Asia and the Middle East in trade and
investments in the recent years.

"The emergence of new financial centres in Asia and the Middle East and
their increased integration has strengthened the foundations for a New Silk
Road," she said.

Furthermore, it had also opened up and extended this potential to developed
economies to forge stronger financial linkages with the growth regions of Asia
and the Middle East, said the central bank governor.

She said, while Islamic finance had demonstrated its resilience during the
challenging period, continuous efforts were being taken to further strengthen
its resilience and facilitate effective liquidity management across the border.

The Islamic Development Bank, for example, has collaborated with IFSB and
formed two task forces -- the Task Force on Islamic Finance and Global Financial
Stability and the High Level Task Force on Liquidity Management.

Through the task force on financial stability, it has established an Islamic
Financial Stability Forum which is held twice a year, a strategic platform for
productive dialogue to promote financial stability.

Zeti said an important dimension of Islamic finance was not only its
potential role and relevance in contributing to global financial stability but
also its potential to support overall global economic growth.

More importantly, it also, represented an important channel for greater
connectivity among emerging economies to not only enhance trade and investment
flows but also international financial flows between nations.

She said these combined efforts would contribute to the stability of the
international financial system and global economic prosperity.

-- BERNAMA



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