Its growth forecasts are among the highest in the EU, but does it serve as an example when levels of unemployment and indebtedness are so high? There are many models: Ireland is one, and Spain too… Employment is a lagging indicator. Moreover, unemployment figures, especially youth unemployment, have already fallen to levels below those at the time that the bank bailout was requested. Indeed, they are above 2008 levels, but I can still recall the levels of 20 years ago, so it’s all relative. They have always been higher than in the rest of the EU, even during the boom years. But I believe the mentality in Spain has changed. The ability to acknowledge the reality and to adapt to it shows that it is a mature democracy. That is the type of mortar we need for a monetary union. Spain feels particularly underrepresented in the EU since you took, in 2012, the rotating seat on the ECB’s Executive Board, which it had occupied since the institution’s creation. Do you think that, given its demographic and economic weight, the situation should be corrected? Passports should play a minor role in European representation, especially in supranational institutions like the ECB. Quotas are inappropriate. When we enter the ECB’s Governing Council meeting room, we leave our passports in the cloakroom. The only conditions laid down by the Treaty are competence and reputation. That’s quite different however in intergovernmental institutions where appointments are the result of allocation. 2  BIS central bankers’ speeches  De Guindos in the Eurogroup?

Takaful companies will also be given the flexibility to enter into strategic tie-ups with foreign partners through higher foreign equity limit of up to 70%, to further strengthen resilience and competitiveness. In addition, international Islamic financial institutions can be established to offer the full range of Islamic financial services to residents and non-residents in international currencies. Another further measure announced is the liberalization of legal profession to allow up to five top international law firms with expertise in international Islamic finance to offer legal services in international Islamic finance in Malaysia. Internationalisation of Islamic finance Several factors are important in sustaining the internationalisation of Islamic finance. Firstly, is the development of international Islamic financial markets to enhance the liquidity of the instruments and the risk management capacity of the players. This is important to promoting the efficient functioning of the markets and thus facilitate cross border capital flows thereby strengthening global financial integration. However, it can be observed that in most jurisdictions that have Islamic financial institutions, Islamic money and capital markets remain relatively less developed. Consequently, Islamic banking institutions face the challenge in their day to day management of cash, arising from the lack of a comprehensive Islamic interbank market with highly rated short-term tradable instruments. Without access to such a market, it is difficult for these institutions to manage their short-term liquidity needs in an efficient and effective manner. This would in turn require them to maintain a larger amount of liquidity compared to their conventional counterparts.