However, the growth of the industry has to extend beyond the numbers to sustain its growth momentum. This is of particular importance in today’s environment of growing global uncertainties and when considerations that prioritise the linkage of finance to the economy, justice and fairness, and sustainability and inclusion and which have been regarded as essential elements of a modern financial ecosystem. Islamic finance, with these inherent features and ethical dimensions, therefore has an immense potential role as a transformative agent in the economy, particularly in serving the requirements of the real economy and the broader society. Of importance is thus the role of the global Islamic financial marketplace in facilitating greater linkages with the real economy and inclusion and thus balanced growth. In evolving into the next growth phase, it remains an imperative for the Islamic banking industry in the global marketplace to reinforce meeting the very objective of its existence as an effective form of financial intermediation that serves the real economy and that complies with the requirements of the Shariah. As an extension to this, Islamic banks have the potential to extend its role to also include the role as an investment intermediary. This would require the diversification of banking business to expand beyond credit intermediation to investment intermediation, in which the alternative modes of risk sharing contracts can be applied. In performing investment intermediation, Islamic banking institutions not only strengthen further the linkage of finance and real economic activity, but also contribute towards more inclusive and more balanced growth.

There are tougher rules for fiscal policies, stronger oversight of macroeconomic imbalances, a lender of last resort for sovereigns in the form of the European Stability Mechanism, and there will soon be a sounder and more integrated banking sector thanks to the creation of the Single Supervisory Mechanism. The euro area has gone through its difficult initial learning phase, and new members will reap the benefits, which certainly outweigh the costs associated with the existence of these institutions. Joining a stronger euro area will increase the long-term prosperity of its members and their resilience to adverse shocks. But there are also other concrete benefits stemming from trade and foreign direct investment, which will be bolstered, especially given Lithuania’s strong trade ties with its two Baltic neighbours in the euro area, Estonia and Latvia. Moreover, Lithuania will be an equal partner at the Governing Council table and will fully participate in deciding monetary policy for the whole monetary union. Do you share the view that being a member of the euro area is an additional safeguard for countries such as the Baltic states or Finland against the spillover effects of geopolitical tensions in Europe (or even an insurance policy against Russian aggression), such as those that we have recently witnessed in Ukraine? Does the euro make us safer and, if so, how? While we currently consider geopolitical developments as a downside risk to growth, I will refrain from commenting on the political aspects of these tensions, as these issues fall outside the mandate of the ECB.