When inflation fell back in the early 1990s it became apparent that the investments in real estate had been founded on unrealistic expectations that prices would continue to rise. The property market collapsed and credit institutions were hit by massive loan losses. The bank crisis accordingly accentuated the economic downturn in Sweden. BIS Review 68/1997  -2-  Inflation is also associated with an arbitrary redistribution of income and wealth, often contrary to the ambitions of distribution policy. Referring again to the 1980s, the chief losers from the inflationary economy at that time, with the resultant price fall, were probably not the property speculators but households whose bank savings were eroded by two-digit inflation and whose wages were only subsequently adjusted for inflation. Price stability is the Riksbank’s objective The reason why monetary policy is assigned the task of safeguarding the value of money is basically simple: by adopting an appropriate monetary stance the central bank can choose, or at least strongly influence, the rate of inflation. In the short run price increases are of course affected by many other factors such as the state of economic activity, the direction of fiscal policy, wage formation, etc. But in the long run inflation is a monetary phenomenon. By controlling the supply of money in a wide sense, in the long term the Riksbank can also govern movements in the value of money and in inflation. Interest rate management by the Riksbank cannot, on the other hand, generate economic growth and employment in the longer run.

The CMH, which will showcase the sophistication of Malaysia's Islamic financial industry, has tremendous global potentials. As the CMH is designed to be a multi-currency platform, it could enhance liquidity and risk management capacity of the international Islamic banking community. Furthermore, it could be harnessed into a cost effective global platform to develop universally acceptable Islamic financial products for the financial and capital market. Overtime, in making CMH into a truly global exchange, the scope of the exchange-traded product offerings could be expanded to include other commodities and the level of participation should be expanded to include players from outside the financial services industry as well. BIS Review 93/2009  1  The MIFC initiative which was launched in 2006 has the objective to internationalise Malaysia's Islamic financial industry and integrate it with the global Islamic financial system. Thus, for the MIFC, CMH provides an important link to elevate further the capacity of Malaysia to serve as a global hub for Islamic finance. It will support the development of a strong network with other financial centres and increase the inter-linkages. The CMH could play a significant role under this initiative by facilitating the capital and liquidity flows from one financial centre to the other. It is envisaged that CMH could be a component to alleviate the problems arising from a lack of cross-border inter-bank transactions currently faced in the global Islamic financial landscape. Eventually, by enabling the flows of funds amongst the global Islamic financial institutions, this would increase the inter-dependency and networking amongst themselves.