Opening Message by YAB Tun Dr Mahathir bin Mohamad Prime Minister of Malaysia
Date posted: 26 November 2019
||13 November 2019 (Recorded on 8 November 2019 at 9.00 am)
|Event / Venue
||14th IFSB Summit 2019 - Islamic Finance for Sustainable Development in the Era of Technological Innovations | Jakarta Convention Center | Indonesia
||YAB Tun Dr Mahathir bin Mohamad Prime Minister of Malaysia
1. It is with great pleasure that I address this distinguished gathering today during the 14th Summit of the Islamic Financial Services Board (IFSB). Even though I am not able to physically join you here in Jakarta, I am pleased to leverage on technology during this Summit whose main theme is on technological innovation.
THE INAUGURATION OF THE IFSB AND SUBSEQUENT DEVELOPMENTS
2. I had the pleasure to be at the inauguration of the IFSB in 2002. It was established at a time when the strengthening of the international financial infrastructure had become a necessity to deal with the inherent tendencies for financial systems to become periodically destabilised. At the time, the size of the global Islamic finance industry stood at about US$200 billion, and was rapidly growing. Not too long after, the world witnessed a great financial crisis in the developed world, the effects of which are still shaping the regulation of financial systems today.
3. We have come a long way since 2002, with the IFSB reporting the value of the global Islamic finance industry at over US$2 trillion in 2018. It is heartening to see the progress the IFSB has made since its inauguration through the standards, guidance notes and research it has introduced to the industry and regulators. Events like financial crisis have illustrated the importance of IFSB’s establishment. It is always easy to observe when a financial crisis has occurred, but it is not so easy to prevent such crisis.
ISLAMIC FINANCE AND THE IFSB’S ROLE
4. As the principles of Islamic finance require financial transactions to be supported by genuine trade or business-related activities. The Islamic financial sector is closely linked with the real sector. This discourages the risk of being overleveraged. The Islamic financial sector may therefore be a source of stability in the international financial system. And the IFSB, through its prudential standards in the recent 15 years, has been active in supporting the stability and soundness of Islamic finance globally. In a world where Islamic finance has already achieved importance in 12 countries, and is gaining traction and market share in many others, the IFSB has reinforced the potential for the stability of the international financial system.
5. In this era, I am sure that every one is aware of terms like blockchain, distributed ledger technology, artificial intelligence and etc. These innovations, among others, are transforming the manner individuals and businesses access financial services. While these developments present new challenges in the regulation of both Islamic and conventional finance, they also offer tremendous opportunities for financial inclusion, sustainability and, of particular relevance to this gathering, mainstreaming Islamic finance. I am happy to see the IFSB being the platform for thought leadership on these emerging issues that face Islamic finance across countries.
6. The IFSB’s accomplishments and continued support for the industry would not have been possible without the unwavering commitment from its members, and the unrelenting cooperation and active participation of the financial community, that is, all of you present in the Summit today.
7. I wish the IFSB the very best in its role to support the sustained growth of Islamic finance, and I wish all of you a productive and beneficial Summit.
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