The Central Bank developed new tools and introduced new policies to facilitate a stable course in both exchange rates and credit growth and hence, helped the rapid recovery of our country from the deepening of the global financial crisis during 2008–2009; and enabled it to weather the European sovereign debt crisis of 2011–2012 with minimum damage. 1  Barro, Robert J. (1995). “Inflation and Economic Growth.” NBER Working Paper Series, No: 5326. 2  Reinhart, Carmen M., and Kenneth S. Rogoff. (2009). This Time is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton Press. ; Taylor, A. (2012). “The Great Leveraging,” NBER Working Papers, No. 18290. BIS central bankers’ speeches  1  Loans and exchange rates are the two main variables, which are significant for not only price stability, but also financial stability. Therefore, decreasing excessive volatility in the credit growth rate and exchange rates underpins financial stability. Distinguished Participants, Now I would like to touch upon the contributions of Turkey to global financial stability. Turkey became a member of the Financial Stability Board (FSB) in 2009. It will take part in G20 Troika in 2014 and assume the Annual Presidency of the G20 in 2015. Moreover, Turkey’s representative from the Under secretariat of Treasury will be assigned to the FSB Steering Committee during the 2014–2016 period when Turkey will be in G20 Troika. Moreover, Turkey became a member of the Basel Committee on Banking Supervision (BCBS) and the Group of Governors and Heads of Supervision (GHOS) in 2009.

The Malaysia International Islamic Financial Centre, or MIFC, initiative, launched in August 2006, has taken Malaysia's liberalisation strategies to a new level with the aim of positioning Malaysia strategically in this new growth area. Islamic banking institutions are allowed to undertake a broader array of Islamic financial activities that include commercial banking, consumer banking, investment banking as well as international currency business under the MIFC initiative. Financial institutions need to consider their own competitive positioning in this area and to have the appropriate strategies to participate in this dynamic growth sector. Finally, the regulatory and supervisory paradigm will also continue to evolve. Indeed, we have over the recent decade witnessed significant global shifts in the approaches to regulation and supervision across many countries. These have ranged from radical policy responses in some countries that led to the introduction of costly regulatory systems to address the problems have emerged, to bold deregulatory measures pursued in other countries, especially during times of exuberance and strong market conditions. A convergence towards the middle ground between these two extremes now seems to be emerging. Two dimensions of regulatory change will be relevant to the context of the new environment. First, the emphasis on creating a strong risk management culture that is fundamental to sound banking operations will become significantly more pronounced. T he transition to Basel II and the implementation of the risk-based supervisory regime are important elements of this change.