On this path, coordination between multilateral and regional institutions is also important, insofar as the latter may complement the support measures provided by international financial institutions. In this setting, the EU should play a leading role in seeking to attain reinforced and inclusive multilateralism, and an area of cooperation governed by international rules. The strengthening of the European project as a support for multilateralism Let me conclude these remarks by focusing on the European policy response to the crisis and on the tasks still pending on the European policy and institutional agenda. On this occasion, we have seen a genuinely common European response, in which the ECB’s monetary policy has not been the only game in town. The creation of the NGEU fund stands out as a decisive tool to support the recovery of European economies at the current juncture. This fund incorporates elements of solidarity and allows us to strengthen the possibilities for countries to transform their economies in light of the challenges ahead. Some of these elements, such as the issuance of large-scale European supra-national public debt to finance reforms and investments in the countries most affected by the pandemic, are unprecedented in the history of the EU. However, the NGEU fund is not – and therefore should not be seen as – the stabilisation mechanism that the euro zone needs as a necessary complement to the single monetary policy. A true macroeconomic stabilisation mechanism should be configured as a permanent institution, with sufficient size, authority in tax matters and financing capacity.

Complementing these three components is Islamic insurance or takaful, that provides the necessary risk protection to its policy holders and to serve as an efficient mobiliser of long-term funds. The spectrum of participants and the diversity of instruments are among the key attributes in creating the enabling environment for a dynamic Islamic financial system. This has been the approach adopted by Malaysia at the very onset of our journey in the development of a comprehensive Islamic financial system that is sustainable and progressive. In the initial stage during the early years of the development of the Islamic financial system, the focus of attention was on the development of the Islamic banking system and to expand the number of players and the volume of banking activity. This has increased significantly when the dual banking system was introduced. This was subsequently expanded to the specialised non-bank institutions, including the development financial institutions, and the savings banks and housing credit institutions, where Islamic financial products and services are being offered. The other core components of the Islamic financial system comprised the Islamic money market, the Islamic capital market and the takaful market. Today, the Islamic money market has become an integral part of the Islamic financial system, with transactions of more than RM2 billion  BIS Review 43/2003  1  a day and a broad spectrum of instruments, among which included the Government Investment Issues, Bank Negara Negotiable Notes, Islamic accepted bills and the Islamic private debt securities.