26 Sweden also has a poorly functioning housing market that is also dependent on the international bond market, as a considerable proportion of the mortgage bonds are owned by foreign investors. If these investors were to lose confidence in the Swedish economy or the housing market and thus start selling their holdings, the banks' funding costs would rise and the result would be greater risks in the financial system. 27 See Final Report of the Riksbank Committee (2019). 16 [30]  Council discusses what measures are needed to counteract the build-up of financial imbalances. The Government has also recently presented a legislative proposal for Finansinspektionen to consult with the Riksbank when setting requirements for countercyclical capital buffers for Swedish banks.28 The Government emphasises that the decisions on how large capital buffers banks should have can have significance for monetary policy and should therefore be taken from as broad a perspective as possible. The Riksbank will return with its views on the Government's proposal to give the Riksbank greater influence over the countercyclical buffer. Central banks can counteract financial imbalances in certain situations. From an economic perspective, it is important that the risks in the financial system are manageable. Macroprudential tools are particularly effective when we know where the risks in the financial system are building up, such as excessive private debt. However, when interest rates are low for a long period of time, it can be difficult to know in advance where in the system the main risks lie.

Government facilitative policies are also an important enabler to accelerate the growth and support the development of the industry. Apart from establishing strong legal and Shariah framework, the Government has also laid down conducive tax legislative that accords tax neutrality treatment for  BIS Review 115/2006  1  Islamic finance transaction. The recent initiative to position Malaysia as an International Islamic Financial Centre, will further spur the business environment thus contribute to create more conducive landscape. This initiative will bring in more players, enhance competition and encourage new diversified products and services, especially in international currencies. This rapid growth and positive performance achieved thus far signifies one of our major accomplishments over the last two decades in Islamic banking and finance. The robust growth of Islamic finance industry today augments the collaborative efforts within the industry to move in tandem to strengthen the position of Islamic finance in Malaysia. As Islamic banking and finance in Malaysia journeys towards global integration and international acceptance, there are key areas in the banking industry that needs to be enhanced to progressively support future development moving forward. Of importance, is the need to effectively engage other stakeholders through various means and approaches including promotional activities and strategies. It is imperative that the approaches adopted to be dynamic and innovative so as to ensure consistency and relevancy with the rapid development of the industry. The KLIIFEX 2006 is well-positioned to be the platform to effectively engage with key stakeholders; i.e. consumers, relevant agencies, scholars and intermediaries.