Background

Development of Islamic finance would ideally promote financial transactions with underlying asset that attached to the goods market or productive economic activities. The application of this ideal is perhaps entails considerable challenge to Islamic financial institutions particularly in creating some sharia-compliant but economically feasible financial products. Yet, the actual stage of economic development in Indonesia, and possibly in other emerging countries, demand alternate solutions to channel available financial resources to productive economic sectors which not only offer growth opportunities, but expectedly would also fundamentally improve the output and structure of countrys economy. Currently, the Indonesian Islamic Banking industry is characterized by a significant financing to deposit ratio, while placement to financial market products still relatively low. Nevertheless, the tendency towards the use of larger financial markets products continues to grow, as it may improve banks efficiency. Thus, the trend of disintermediation following the improving performance of financial markets and investment rating, are inevitably will affect the future shape of Islamic banking. However, the fact of repeated financial crises including the most recent financial market and debt crisis, seem to confirm risk pertinent to this tendency. The experience from the latest financial crisis has, in general, changed the landscape of regulatory and supervisory framework of central banks, relevant authorities and development agencies. The changes referred to, among others, a tendency toward stricter regulation and monitoring especially for systemic financial institutions, restrictions on certain business activities, as well as enhanced transparency to reduce the potential for moral hazard. In some respects, these changes may not be relevant to the current state of the Islamic financial industry, though the nature of these policies still need to be understood by regulators. Perhaps more important is to reconsider the effectiveness of such solutions and any other alternatives in crisis prevention and what should authorities do, by exploring solutions which are more appropriate for more balanced and sustainable financial institution and economic growth from the perspective of Islamic financial system. Development of Islamic financial system is inextricably associated to the interest of the state and development agencies to reduce poverty and improve various parameters of welfare for more balanced economic growth. These objectives can be achieved by involving the large part of communities in the process of economic development, which in the context of the financial system is done by making financial services acceptable by, as well as accessible to, the public. In this regard, it is important for Islamic finance stakeholders to adopt more effective strategy to strengthen the role of the Islamic financial institutions to improve public awareness and access to financial services. With regard to the abovementioned issues, this seminar will address various topics related to the role of Islamic finance in supporting the development of real sector, while improving social welfare and enhancing financial system stability.

2nd Bank Indonesia International Seminar,

May 2012

Welcoming remarks : HE Governor of West Java Province Opening remarks : HE. Dr. Halim Alamsyah, Deputy Governor, Bank Indonesia Keynote Adress : HE. Dr. Ahmad Mohammed Ali, President, Islamic Development Bank HE. Dr. Darmin Nasution, Governor, Bank Indonesia

Topics will be discussed : Islamic Finance, Financial Stability and Sustainable Economic Growth: bringing virtues into reality through regulatory incentives Contemporary approach of the central bank role in stimulating real sectors growth: a step towards implementation of an Islamic economics compatible role of central bank Euro area debt crisis: lesson learn from imbalance spending on productive economic investment and what should authorities do Increasing awareness of Islamic finance for economic development practices and concept by regional multilateral agency The role of Islamic FSAP to support financial stability in the economy Speakers : IMF (tbc) Prof. Dr. Iwan Jaya Aziz, Head of Office of Regional Economic Integration, Asian Development Bank Dr. Dadang Muljawan, Islamic Development Bank Dr. Mehmet Asutay, Durham University Bank Indonesia Moderator : Mr. Tirta Segara (Bank Indonesia)

Topics will be discussed : The close relations between optimal banking lending with economic productive activities Enhancing support of Islamic banks to corporate and SMEs financing activities: lesson from Turkish Islamic banking model The future model of Islamic banking business: industry perspectives Integrating ZIS and awqaf with Islamic financial services Integrating real sector indices into Islamic banking pricing: an effort to enhance the Islamic banking bussines model to real sector. Speakers : Dr. Eli Remolona, Head of Bank for International Settlements - Hongkong Dr. Lokman Gunduz, Board Member Central Bank of Turkey Mr. Yuslam Fauzi, CEO Bank Syariah Mandiri (tbc) Mr. Ahmad Juwaini, Executive Director, Dompet Dhuafa Dr. Rifki Ismal, Directorate of Islamic Banking, Bank Indonesia Dr. Bambang Hermanto, University of Indonesia Moderator : Dr. Dadang Muljawan, Islamic Development Bank

2nd Bank Indonesia International Seminar,

May 2012

Topics will be discussed : Expanding Islamic Financial Services Access to Indonesias Small and Medium Enterprises The role and practices of Islamic banking in empowering lower income communities The role of ICT to facilitate broader communities access to financial services Challenges in improving financial literacy and potential role of Islamic financial institutions Speakers : Dr. Thomas Timberg and Prof. Iraj Toutounchian, World Bank Bank Indonesia Mr. Moch. Hadi Santoso, CEO Bank Rakyat Indonesia Syariah CEO Bank Tabungan Pensiunan Nasional (tbc) Ms. Mike Rini, Mike Rini Associate & Financial Planning and Education Moderator : Prof. Nen Amran, PhD (Padjajaran University) (11.00 AM - 12.30 PM) Topics will be discussed are the experience, background, values and opportunities of bussines practitioners and entities which using Islamic finance for their operating and/or expanding their activities from various bussines sectors. Speakers : Mr. Faizal Mansor, CFO Malaysia Airports Holdings Berhad, KLIA airport Malaysia (infrastructure sector) Mr. Bobby Gafur Umar, CEO Bakrie & Brothers (holding company of various business) PT. Indah Kiat (manufacture sector) (tbc) PT. Bersaudara Simalungun Energi (energy sector) Moderator : Dr. Suryani S.F. Motik, President Director of Prima Group (tbc)

Topics will be discussed : Enhancing role of financial market to support the development of productive sectors through sharia compliance instruments Developing a project-linked Sukuk: market and regulator perspectives Developing comprehensive line of products for trade & financing Structuring sharia compliant hedging instruments Speakers : Mr. Dahlan Siamat, Director of Islamic Finance Policy, Debt Management Office - Ministry of Finance Ms. Friderica Widyasari Dewi, Director of Bussiness Development, Indonesian Stock Exchange Mr. Ijlal Alvi, CEO International Islamic Financial Market , Bahrain Mr. Razi Fakih, Deputy CEO HSBC Amanah, Dubai Mr. Adrian A. Gunadi, Director of PT. Bank Muamalat Indonesia CEO Kuwait Finance House (tbc) Contact Person : irfan@bi.go.id

Moderator : Mr. Rizqullah, CEO BNI Syariah (tbc)

2nd Bank Indonesia International Seminar,

May 2012