The standards issued by AAOIFI have contributed towards improved quality of financial statements and reporting methodology of Islamic financial institutions. AAOIFI has also issued standards on the role of the Shariah committee as well as the code of ethics that should govern the accountants and auditors of Islamic financial institutions. Efforts by AAOIFI have also accelerated the pace of transparency and corporate governance of Islamic financial institutions. Fourth, risk management framework Emphasis on improved corporate governance goes hand in hand with the need for improvements in risk management standards. Sound risk management practices will minimise adverse consequences faced by financial institutions during periods of uncertainty. Robust internal controls to provide qualitative standards are also necessary to complement the quantitative analysis of risk to provide a check and balance in the overall risk management practices. Effective risk management systems is central to supervisory efforts. The risk management system in Islamic institutions need to be able to address the unique characteristics and attributes associated with Islamic financing operations involving financial contracts and instruments which may give rise to other risks besides credit risk. The risk management infrastructure needs to be in place to facilitate the identification, measurement, monitoring and control of all inherent risks present in all the various types of financing so that the specific risks involved may be ‘unbundled’. The complexities of the respective risks in the Islamic financial instruments therefore need to be fully explored and quantified to provide for their effective assessment and management.

Deep social and demographic changes have altered household behavior in terms of work, saving and consumption, while technological development, the densification of value chains and changes in consumer preferences broaden the range of firms’ choices about how and for whom to produce. All this will force the Central Bank to multiply its efforts to generate new data and analyses, to better understand the international transmission mechanisms, the financial behavior of households, the sources of systemic risks in the banking industry and the operation of key markets, such as those for financial derivatives and mortgages, among others. A better understanding of expectations-building mechanisms and the bases of consumer and business confidence can also help the Bank fine-tune the mechanisms to communicate its policy decisions so that it can provide reliable guidance to the markets. But the need for greater transparency does not end in monetary and financial policy, because the Central Bank, being a public institution, must be able to adapt its standards of transparency to the changing needs of markets and to the demands of Chilean citizens. It must also be able to identify and prevent new perils threatening the performance of its various functions. At this point, it is particularly important to ensure the continuity of the payment systems and operations whereby monetary policy takes place, because of the great technological developments in this area and the high costs of any failure.