In order to prevent deflation and recession, the central banks of major advanced countries have implemented extraordinary measures to keep both short- and long-term interest rates low. The medicine has worked. The US economy in particular is on the road to recovery, and there are signs of some revival in manufacturing. Financial market participants see opportunities, not just problems. However, there are also signs of renewed turbulence in a number of emerging economies. Volatile capital flows are creating problems. High debt growth and rising house prices may constitute a risk. The recovery abroad is fragile. The key policy rate is also low in Norway. Our inflation target is slightly higher than that of other European countries. As a result, inflation and nominal interest rates in Norway will also be slightly higher. But prospects for a persistently low interest rate level internationally will inevitably also have consequences for Norway. The real interest rate in a small open economy such as ours cannot in the long run differ substantially from that of our closest trading partners. Given the prevailing long-term interest rates abroad, it will likely take a number of years for interest rates in Norway to move up towards a level that was previously considered to be normal. Banking regulation When the drafters of the Constitution gathered at Eidsvoll, there were no private banks in Norway. Norwegian businessmen who needed credit had to borrow from friends or acquaintances or travel to Copenhagen or Hamburg to raise loans. This was expensive and cumbersome.

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.