Combining multiple objectives into a single one, on the other hand, would only apparently solve the problem by artificially reducing the number of goals, but it would not change the fundamental nature of the control problem facing the policymaker. At the current juncture, only very little research is conducted on the interaction between monetary and macroprudential policies within rigorously microfounded general equilibrium models. The Banque de France staff and I are very admirative of the leadership of Banca  7  See Claudio Borio and Haibin Zhu (2008), “Capital Regulation, Risk-Taking, and Monetary Policy: A Missing Link in the Transmission Mechanism?”, BIS Working Paper n. 268, December 2008. 8  See Yener Altunbas, Leonardo Gambacorta, and David Marqués-Ibáñez (2010), “Does Monetary Policy Affect Bank Risk-Taking?”, ECB Working Paper n. 1166, March 2010. 9  See Vasso Ioannidou, Steven Ongena, and José-Luis Peydró (2008), “Monetary Policy, Risk-Taking and Pricing: Evidence from a Quasi-Natural Experiment”, ECB, mimeo; Matteo Ciccarelli, Angela Maddaloni, and José-Luis Peydró (2009), “Trusting the Bankers: Another Look at the Credit Channel of Monetary Policy”, ECB, mimeo. 10  See Benoit Mojon, Simon Dubecq and Xavier Ragot (2010), “Fuzzy Capital Requirements, Risk Shifting and the Risk Taking Channel of Monetary Policy”, Banque de France mimeo. 11  See Raguram Rajan (2005), “Has Financial Development Made the World Riskier?”, presented at: The Greenspan Era: Lessons for the Future, a symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, August 25 – 27, 2005.

In complementing the sukuk market as a source for fund raising, also being explored are other funding channels to assist small and medium enterprises, new growth industries and entrepreneurs that have limited access to the sukuk market. A multi-bank investment platform is now being developed for the effective matching of funds from potential investors with targeted industries and ventures in the real sector. Foreign Islamic financial institutions and investors also stand to benefit from this platform, with the offering of multi-currency financing options for foreign projects. The platform facilitates Islamic banks to perform  2  BIS central bankers’ speeches  investment intermediation functions. It enhances further the intermediation role of the Islamic banking institutions to also function as an investment intermediary. In an increasingly internationalised global financial marketplace that has generated significant cross-border flows, one of the requirements as we advance forward is the need for more tradeable cross-border Islamic financial instruments that can cater to the different profiling of investors’ risk appetites. The issuance of the short-term sukuk by the International Islamic Liquidity Management Corporation (IILM) is a breakthrough in innovation towards increasing cross-border liquidity flows that could potentially enhance financial stability and the efficient functioning of the Islamic financial markets. Let me conclude my remarks. There is clear indication of the growing relevance and importance of the sukuk market, with the growing interest from both emerging and developed jurisdictions and the strategic approaches taken to diversify the funding sources through the sukuk market.