32  Haldane (2011), Mehran and Mollineaux (2012). 33  Bank of England (2012), Bank of England (2011b). BIS central bankers’ speeches  9  In finance, these tragedies of the commons are, if anything, more likely than in other fields (seas, beaches and forests). The financial crisis attests to that. If there were a benign, enlightened regulatory planner, able to redirect competitive forces, this could potentially avert future tragedies of the financial commons. Fortunately, there is. References Aikman, D, Haldane, A G and Nelson, B (2010), “Curbing the Credit Cycle”, available at http://www.bankofengland.co.uk/publications/Documents/speeches/2010/speech463.pdf. Angel J, Harris L and Spatt C (2010), “Equity Trading in the 21st Century”, Marshall School of Business working paper. Bank of England (2012), “Record of the interim Financial Policy Committee Meeting, 16 March 2012”, available at http://www.bankofengland.co.uk/publications/ Documents/records/fpc/pdf/2012/record1203.pdf. Bank of England (2011a), “Instruments of Macroprudential Policy – A Discussion Paper”, available at http://www.bankofengland.co.uk/publications/Documents/other/ financialstability/discussionpaper111220.pdf. Bank of England (2011b), “Record of the interim Financial Policy Committee Meeting, 23 November 2011”, available at http://www.bankofengland.co.uk/publications/Documents/ records/fpc/pdf/2011/record1112.pdf. Barclays Capital (2012), “Over Promising? Encumbrance at European Banks”, 8 March. Byatt, A, Fothergill, A and Holmes, M (2001), “The Blue Planet: A Natural History of the Oceans”, British Broadcasting Corporation. Bebchuk, L A and Fried, J M (2003), “Executive Compensation as an Agency Problem”, Journal of Economic Perspectives, Vol. 17(3), pages 71–92. Brunnermeier, M K and Oehmke, M (2010), “The Maturity Rat Race”, National Bureau of Economic Research, Working Paper 16607.

As an example, for an instrument issued based on Ijarah principle using the property as its underlying asset, the actual rate of rental can be used to determine the rate of return on this instrument. The indicator of the rate of rental will fluctuate based on the demand and supply of the said property. By having its own indicator, it will give a true reflection of the price of the underlying property asset as opposed to being linked to the KLIBOR which has no direct correlation with the changes in the rental rate. Actively promote the role of the market players The Islamic financial services industry is expected to benefit from the recent increase in the number of players following the launching of Islamic subsidiaries, the issuance of foreign Islamic banking licences and the measures to issue additional takaful licences. The entrance of these players will contribute to an active participation in both the primary and secondary markets for Islamic financial instruments. Ladies and Gentlemen,  2  BIS Review 49/2005  I hope this seminar will crystallize positive ideas to pave the way and contribute towards the development of a more vibrant and dynamic Islamic financial system. I wish to take this opportunity to thank the speakers for accepting our invitation to share their invaluable knowledge and experiences in this Seminar. The participation by researchers and practitioners in the Islamic financial system is also important. On this note, I wish you all a successful seminar. BIS Review 49/2005  3