Business

Wednesday February 25, 2009

Zeti: Globalise Islamic finance to weather economic crisis

By CHOI TUCK WO



twchoi@thestar.com.my

LONDON: Malaysia has called for the internationalisation of the Islamic financial system in weathering the global economic crisis.

Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said Malaysia and Britain could optimise the potential synergies from such collaboration in tackling the financial turmoil.

She said the move could also strengthen linkages between nations in preparing for the next phase of development of the global economic and financial systems.

“Both Malaysia and Britain can pave the way towards bridging Islamic financial markets between the East and the West,” she said in her keynote address at the start of the two-day Eighth Annual Islamic Finance Summit yesterday.

In the evening, Dr Zeti received an award for her outstanding contribution to Islamic finance by Euromoney magazine’s managing director Simon Brady.

Dr Zeti said the participation of international financial centres such as London would reinforce the trend of greater internationalisation of Islamic finance.

She said this would help strengthen inter-linkages in the international Islamic finance system and the optimisation of the allocation of financial resources across borders.

“Such a move will also contribute towards enhancing global financial stability through the greater diversification of risks,” she added.

Dr Zeti said Malaysia and Britain could collaborate in areas such as liquidity management, sukuk market and Islamic finance training and education.

She said Malaysia had a vibrant Islamic money market where the range of Islamic money market instruments could be a robust platform for the development of a bilateral currency market.

“With Islamic infrastructure in Malaysia and London’s global reach, a mutually enriching international currency Islamic money market could be developed,” she added.

In the immediate term, it could accord advantages to Islamic financial institutions in Britain and Malaysia to manage their liquidity management requirements.

Dr Zeti also spoke of Malaysia co-operating with London in cross-listing of sukuks, where a mechanism could be put in place for sukuks issued in one jurisdiction to be recognised by the other.

She said the University of Reading and International Centre for Education in Islamic Finances in Malaysia had a partnership in providing Islamic finance training and education.

Later, Dr Zeti described the award as an honour and a tribute to Bank Negara and its team which helped build up Islamic finance in Malaysia.

“But we can never sit back and feel very pleased with ourselves because there is so much more to do,” she added.

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