The Islamic Financial Services Board (IFSB) has introduced prudential standards for the Islamic financial services industry – in all key areas of capital adequacy, risk management, corporate governance and Shariah governance. Their implementation would in turn promote more consistent regulatory and supervisory frameworks across borders. Importantly, the adoption of these international prudential standards which are aligned to the core principles and standards adopted by the Basel Committee, the International Association of Insurance Supervisors (IAIS) and the International Organization of Securities Commissions (IOSCO), would serve to minimise the opportunity for regulatory arbitrage arising from cross-sectoral and cross-border differences, whilst ensuring that the regulatory requirements that are distinct for Islamic finance are effectively addressed. A survey conducted by the IFSB in 2011 indicated that 9 countries have implemented the standards issued by the IFSB and that 18 countries are expected to implement them within the next five years. Their consistent implementation will be vital. This harmonization will also facilitate consistent participation in Islamic finance across borders and contribute towards global financial stability. Whilst micro-supervision is an integral part of the toolkit for ensuring financial system stability, the recent global crisis highlighted the need for it to be complemented by macroprudential surveillance and measures. This dimension of prudential regulation involves the incorporation of horizontal assessments of risks across institutions, sectors and national borders, including the risks in asset markets. This is to address systemic risks and to take into account the interconnectedness within the financial system.

The Central Bank forecasts the forthcoming inflation performance; this forecast is then compared to the targeted inflation rate; and the difference between the forecast and target determines the proper adjustment of the monetary political instrument. But, unfortunately or perhaps, fortunately, this relatively new monetary regime is not the rescue solution of a central banker’s affliction. I am confident that the honourable participants who are speaking during the three days of the seminar, shall enlighten in more details, based on the experiences of the central banks they represent, the complex issues and challenges they had to encounter, while adopting this regime. The agenda of this three-day seminar seems promising, and the interweaving of theory and practice is outstanding. It begins with the theoretical considerations on inflations targeting, proceeds with the three main pillars of monetary policy communication: independence, transparency and accountability. Not by accident, the new approach required by the inflation targeting regime has been defined as the “forecast path”. The distinguished economists from the Centre of Central Banking Studies shall introduce us to the econometric techniques, which come to help during the inflation forecast process. To conclude, the Czech National Bank, shall bring the experience of an economy in transition adopting this regime. And last but not least, on behalf of the Bank of Albania, I would like to thank the Centre of Central Banking Studies (Bank of England) for the opportunity granted to the institution I govern, to cooperate  1/2  and to consent the holding of this regional seminar in our country.