The initial work will require a deeper assessment of the interconnectedness of firms and the prioritization of critical operations. We will be working with all of you to do that. Once we all have a better understanding of the areas of risk, we all need to focus on timely and centralized communications across all firms. Finally, while there is a lot of guidance in this area, we recognize that we need to review our supervisory approach and our tools to ensure we are in the best position to understand and assess vulnerabilities. This step is critical so that we can make timely and informed decisions that enhance the effectiveness of our supervisory framework for cybersecurity. I think we’ve done a reasonable job in developing rules and regulations to ensure firms are prepared to withstand the other types of shocks we have experienced in the past. But, cyber adds an element to planning for the next crisis that goes beyond what additional capital and liquidity, for example, can provide to the system. The topic is a daunting one, but one that we have to address in the very near-term. It is an area that will continue to warrant attention and will require a level of coordination and collaboration between the public and private sectors. In many respects, I think we are all in this one together. The second dimension is legacy: There is still so much “clean-up” to do to fix longstanding technology and data issues that have built up over the years.

Access to interbank money markets for short-term borrowings gives considerable flexibility to banks to adjust their short-term cash flows. Existence of secondary markets for financial instruments is also an important source of liquidity. However, this conventional mechanism of liquidity management including interbank market, secondary market financial instruments  BIS central bankers’ speeches  1  and facilities from the central bank as the lender of last resort are all based on interest and therefore, not acceptable for Islamic financial institutions. In addition to the challenges regarding the liquidity management, there are also supervisory and regulatory issues to be considered. In order to resolve the differences in country level regulations regarding appropriate Shari’ah-compliant instruments, working on globally accepted liquidity management regulations and infrastructure could be a viable option. Establishment of a carefully designed and structured Global Shariah Supervisory Board could be a step in the right direction. In this context, we also appreciate the excellent and productive work of Bank Negara Malaysia, the Gulf central banks and other parties. As a major effort, the International Islamic Liquidity Management Corporation (IILM) has been established to assist institutions offering Islamic financial services in addressing their liquidity management issues in an efficient and effective manner. This institution addresses one of the fundamental problems of Islamic financial institutions: the provision of adequate liquidity in times of stress. Once there is an international lender-of-last-resort facility (to complement and not to replace existing national facilities), the provision of Islamic financial services will be carried out with an increased confidence.