This is where macro-prudential policy tools come into play. While the analytic basis and calibration of instruments such as pro-cyclical capital requirements or leverage ratios require further elaboration, the hope is that such measures can contain the accumulation of financial imbalances and vulnerabilities without recourse to changes in short-term interest rates. Monetary policy and macro-prudential policy: two policy instruments and two policy objectives. At least in principle, the Tinbergen problem is resolved. But practicalities stand in the way. As I said earlier, it is immediately apparent that monetary policy and macro-prudential policy will interact in a variety of potentially complex ways, throwing up new challenges for policy-making. Of course, what is required is the “right  24  10  See: J. Tinbergen (1952), On the theory of economic policy, Amsterdam, North-Holland. BIS Review 45/2010  combination” of prudential policies and monetary policy – a combination that simultaneously achieves both price stability and financial stability. How is this combination best achieved? We can draw some important lessons from our assessment of the interaction between monetary and fiscal policy in the past. Attempts to develop an optimal “macroeconomic policy mix” are superficially attractive, but have typically foundered in practice. As the responsibilities of different policy-makers become blurred, their incentive to act appropriately is diluted and ultimately the overall coherence of the policy stance is lost. The institutional framework for monetary policy in the euro area reflects these concerns. The single monetary policy is independent and has been assigned an unambiguous objective of price stability.

On the path to achieve stronger, more balanced and sustainable growth, the potential of responsible finance has therefore become greater than ever. Most important is for finance to be aligned towards its ultimate goal of serving humanity and of uplifting social wellbeing. Thus, more than merely performing its role as a passive intermediary of funds, finance today has the distinct potential of catalysing and shaping social outcomes. As mobilisers of funds towards socially empowering activities in the economy, the financial sector can act as a "social multiplier", significantly expanding the impact of positive finance. This is what responsible finance can achieve. Infrastructure financing, with its focus on longterm and socially impactful considerations, is an area of finance that can be instrumental in filling the vast development needs of many emerging economies, with an estimated global funding demand of about USD57 trillion by 2030, or about USD1 trillion a year. Recognising this, greater attention has been focussed on infrastructure finance, both at the national and international levels. The evolution of the sukuk market, in particular, has been an effective avenue in bridging this financing gap. Since 2003, an estimated USD115 billion of infrastructure sukuk has been issued by more than 10 different countries, which has been vital in contributing towards the long-term development of these economies. In Malaysia, the sukuk market has similarly been pivotal in supporting infrastructure financing, with Malaysiadomiciled infrastructure sukuk accounting for 79 percent of global infrastructure sukuk issuances in 2015.