A mere six quarters could therefore simply be too short a time horizon to allow for money to begin transmitting in any significant way its impact on inflation. The Fischer et al. paper will prove to be particularly valuable if it encourages further research to investigate the relevance and stability of its findings under different inflation regimes, in different economies and over longer time horizons. In this context, let me now briefly turn to the Swiss experience with money and monetary policy. 3. SNB experience using information from monetary aggregates  With the collapse of the Bretton Woods system, the SNB had to search for a new policy framework. 1 From 1974 until the end of the 1990s the SNB announced monetary targets; first for M1, and eventually for the monetary base. In 1978, the SNB abandoned its monetary target for a short period in favor of a nominal exchange rate target. 2 During the second half of the 1990s, the monetary base became instable. The SNB faced increasing difficulty using a money target for MO, let alone to communicate through them. Finally, the SNB decided to adopt an altogether new monetary framework in an effort to increase the clarity, transparency, and flexibility of the conduct of its monetary policy. The new concept, introduced in January 2000, is based on three elements: an explicit definition of price stability, an inflation forecast as the main indicator for policy decisions, and a range for the 3-month LIBOR as the operative target.

This has led to its proliferation through multiple layers of leveraging and disproportionate distribution, in turn, which could result in higher systemic risks, thus, increasing the potential for instability in the financial system. In addition, transparency represents a basic tenet underlying all Islamic financial transactions. There is an inherent obligation on Islamic financial services providers to meet the appropriate standards of transparency. It is from the profit-sharing feature of Islamic financial transactions that imposes a high level of disclosure in the financial contract. The accountabilities of the respective parties involved in the transaction are clearly defined in the contract. This transparency also provides a strong incentive for Islamic financial institutions to appropriately manage risks. This disclosure allows the market to assign the appropriate risk premiums to the respective companies and thus the potential for the enhanced role of market discipline to take effect. These inherent features as required by the Shariah injunctions provides inbuilt checks and balances which serves to ensure financial stability in the Islamic financial system. These features are also reinforced by the development of a comprehensive regulatory and supervisory regime which has been strengthened considerably with the establishment of the Islamic Financial Services Board in 2002. It's establishment has also contributed to the harmonisation in the development of Islamic finance across different jurisdictions. Finally, education institutions have been established to develop the supply of professional talent and expertise in Islamic finance to support the growth and development of Islamic finance going forward.