KUALA LUMPUR: The global Islamic financial system is now operating at a time when the international economic and financial environment has become immensely more challenging, said Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz.
She said that new risks that are more complex, with more profound systemic implications are emerging with the increasing forces of financial liberalisation, globalisation, technological advancement, intensified competition, financial innovation and the internationalisation of Islamic finance.
Cumulatively, these developments necessitate greater prudential regulation and supervisory oversight to ensure a resilient and sustainable financial system, Zeti said at the Islamic Financial Services Board (IFSB) Industry Engagement event on Thursday.
Zeti added that in Malaysia, Islamic banks now have the potential to be better able to pursue their role as investment intermediaries through the offering of investment accounts in addition to the entrenched deposit products, in which various modes of risk-sharing contracts can be applied.
"This is supported by the legal recognition of investment accounts in the Islamic Financial Services Act 2013 (IFSA). It provides a differentiation between the deposit account and the investment account which offers a new investment avenue that caters for a wider range of investor risk-return preferences," she said.