2. Today’s launch of the Islamic Finance Gateway by Thomson Reuters is indeed a welcome development. The timely access to a broad range of key information on Islamic finance including on the products terms, structures and Shariah rulings will contribute to enhanced transparency in the Islamic financial markets. As a platform that allows for price discovery, it will contribute towards the more efficient functioning of the Islamic financial markets across the world in the various jurisdictions and thus foster a greater international understanding of Islamic financial practices in the various Islamic financial markets.
3. This Gateway will also include in its content, to provide a platform for greater engagement amongst practitioners, scholars, regulators, academicians. In particular, it will include the Shariah resolutions database of the International Shariah Research Academy (ISRA) with the signing of the memorandum of understanding between Thomson Reuters and ISRA that is scheduled today. ISRA was established in 2008 in the area of Shariah and to promote applied research contemporary issues in Islamic finance. Their efforts have contributed to the harmonisation of Shariah interpretations and thus the standardisation of Shariah applications and practices is Islamic finance. ISRA has now become an important repository of knowledge for Shariah views or fatwas. The Reuters Islamic Finance Gateway thus has the potential to become an important vehicle for worldwide dissemination of high quality information on Islamic finance. Indeed, in performing the function as an aggregator of information on Islamic finance, the Gateway will showcase the dynamic pulse of the global Islamic financial services industry.
4. This increased information flow across borders in real time will also reinforce the trend of the internationalisation of Islamic finance. There is already an increasing level of foreign participation in the Islamic financial markets resulting in the increase of cross border flows in the international Islamic financial system. The increased information flow would allow for the raising of funds in different jurisdictions while the trend has been for the investor base to be broadened further. Liberalisation has also brought greater institutional presence beyond national jurisdictions resulting in diversity of players. Cumulatively, these developments have strengthened further the international financial linkages between different jurisdictions and have contributed towards the more efficient allocation of resources across borders.
5. This recent global financial crisis has highlighted the risks associated with financial globalisation. Equally important in the process of internationalisation is therefore the quality of this financial globalisation. Let me touch on two aspects of the financial globalisation of Islamic finance. Firstly, that Islamic finance has been more inclusive in terms of its outreach to not only participation from the developed world but also from the emerging world, particularly from Asia and the middle-East. With the relatively better growth prospects in the emerging world, strengthening the economic and financial inter-linkages among the emerging world would mutually reinforce these prospects. The increasing role of Islamic finance in bringing together different parts of the emerging world, and enhancing its links with the developed world would facilitate further this globalisation process.
6. The second aspect relates to the current increased global engagement by the international community to drive the financial reform agenda. In this process, it is important for this engagement to be extended to the prudential standard setting entities for Islamic finance as it becomes a growing component of the international financial system. While there needs to be recognition of the prudential standards that have been issued by the Islamic Financial Services Board, there also needs to be awareness of the implications of the new standards to be introduced on Islamic finance. This is important given the common interest of global financial stability.
7. Let me conclude by saying that today’s launch of the Islamic Finance Gateway by Thomson Reuters marks another important milestone in the international development of Islamic finance. Such a comprehensive information and trading portal for foreign and domestic participation in the Islamic financial system will contribute towards its efficiency and effectiveness as a form of financial intermediation. On this note, I wish to congratulate Thomson Reuters on the occasion of the official global launch of this Islamic Finance Gateway.
Thank you.
22 February 2010
Source : MIFC.com