asalam alaikum and hi my name is Shaimi and today I will be discussing one of the most significant challenge currently facing the Islamic financial system which is suku defaults suku also known as Islamic bonds are certificates that show ownership in real asset project or investment unlike normal bonds suku follow Islamic rules sharing which does not allow interest and require sharing of risk the suku market has grown very fast in the last 20 years in 2024 the total value of suku around the world was more than1 trillion US it showed that suku are very important for funding big projects business grow and develop in most countries even though suku are successful they still have risk a suku develop happens when the company or cannot pay profit or return the money to investor on time but solving suko default is not as easy as with normal bonds this is because Islamic finance does not allow interest charge for late payments and so must be backed by real assets there are a few reasons why suku defaults happen first when the economy is bad or the issuer has financial problems they may not be able to pay investors second some SUKO have unclear legal terms especially about who owns the asset and what investor can do if there is a problem third there is no single standard for suku each country may have different sharing are and legal sus which can cause delays and confusion when trying to solve defaults let's look at some examples of su defaults in 2009 ner in Dubai almost defaults on $3.5 billion suko this caused fear in the market until the government step in next in Kuwait companies like investment D and international investment group defaults and fixing the problem took a long time and in the UAE Dana guests say it $920 billion suku was no longer shar compliance which caus problems in Asia suku defiles are handled better because of clear legal and sh which helps solve the issues more smoothly so defaults are hard to solve because of a few challenge one Islamic finance does not allow interest pay late penalty so companies may not feel pressure to pay on time second in some sugu is not clear who owns the real asset so the investor does not know what they can claim third every country has different law and sharing rules so solving the problem can take a long time and become complicated and last it's not easy to follow sharing rules while also taking real action like selling asset or changing the soot during a crisis to solve the problem with suku defaults regulators and shar expert have started to introduce new rules for example an organization called AOFI accounting and auditing organization for Islamic finance institutions intro sharing our standard 62 this standard helps make sure are backed by real asset and the investor rights are clear in Malaysia the Securities Commission has made clear guidelines for how to issue suku and manage defaults this has helped keep investor confidence in the market stable however this news rules can also make the sole process more difficult and expensive which might make some investor less interest so defaults can cause big problems in the Islamic financial system first investor may lose confidence and issuers may find is harder to raise money second the market can become dividend as investor may prefer suku from countries with stronger legal protection most importantly since suku are often used to build roads schools and hospitals defops can delay or stop important projects which can hurt economy and social progress so how can we reduce defs first countries should work together to make their legal and shy rules more consistent second companies should give investor clearer and more honest information about the risk third a stronger secondary markets for sukot should be developed so investor can sell more easily and last suku should be designed with real risk rearing not just like that so both the company and investor share their responsibility fairly in conclusion suku defaults are a serious issue in Islamic finance they show that there are weaknesses in the legal shar and regulator system that must be improved if regulators scholars companies and investor work together better solution can be created to protect investor and make the so-called market stronger that's all from me thank you for listening