Reshaping the international financial architecture for balanced and stable growth

This article contains excerpts from the keynote address at the inauguration of the Islamic Financial Services Board IFSB, given by the Prime Minister of Malaysia Dr. Mahathir Mohamad. As a result of the growing uncertainty and weakening global economic prospects, international financial reforms need to be undertaken to promote stability, equity, and alleviate poverty. Free markets have not demonstrated the ability to regulate their own ethical behavior; governments need to provide effective oversight while promoting the benefits of free trade and globalization. Islamic and conventional banking systems should operate cooperatively as voluntary options in order to ensure economic stability. The risk-sharing component of Islamic banking promotes smart partnerships, entrepeneurship, better project management, and enhanced loan performance. The Islamic Financial Services Board will help to develop stronger and standardized regulations for the industry, paving the way for its continuing gro