2 For a detailed discussion, see Frank Smets (2014), “Financial Stability and Monetary Policy: How Closely  Linked”, International Journal of Central Banking Vol. 10 No. 2. 3 See Markus Brunnermeier and Yuliy Sannikov (2014), “A Macroeconomic Model with a Financial Sector”,  American Economic Review Vol. 104, No. 2, February. 4 For a quantitative evaluation of the relevance of the Tinbergen’s principle in this setting, see Julio A. Carrillo,  Enrique G.Mendoza, Victoria Nuguer, Jessica Roldán-Peña, (2018), “Tight money – tight credit: coordination failure in the conductof monetary and financial policies”, ECB Working Paper No 2129. They show that a regime with separate financial and monetaryinstruments yields significant welfare gains. 5 See Jeremy Stein, “Overheating in Credit Markets: Origins, Measurement and Policy Responses”, speech at the  Federal Reserve Bank of St. Louis Missouri, 7 February 2013. He actually concluded that while policy rates have the ability to reach into all corners of the economy, it would be better to use targeted supervisory and regulatory measures to address localised imbalances as they have less potential to damage the economy. 6 L. Christiano, C. Ilut, R. Motto and M. Rostagno, “Monetary Policy and Stock Market Booms”, paper prepared for  Macroeconomic Challenges: the Decade Ahead, A Symposium Sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming August 26 28, 2010. 7 See Financial Stability Review, European Central Bank, May 2018. 5/5  BIS central bankers' speeches

This is where the Shariah community has to elevate itself, providing guidance that serves as the setting compass for institutions in charting new strategies and enabling the structuring of new innovative solutions. One way to sail through this is by establishing parameters and guidelines as readily implementable approaches. This involves ongoing experimentation, assessment, and learning in any uncertain environment. Shariah recommendations need to accommodate different permutations in varying situations, given the flexibility afforded in Shariah. It is in this spirit that the Bank is currently finalising the Discussion Paper on H ajah that serves as a toolkit in applying hajah, taking into consideration the different magnitude and severity of situations. Hajah application, however, should not be considered as a permanent solution, but it is rather a temporary way out to accommodate certain justified need and necessity. Hence, a clear interpretation of hajah from the context of contemporary financial practices, supplemented with in-depth understanding of its impact will unlock uncharted opportunities for Islamic financial institutions to explore more diversified approaches in delivering financial solutions within the safe boundaries of Shariah compliance. This nudges a refreshed Shariah viewpoint in steering commercial decisions, pushing beyond the frontiers of traditional norms. The implementation of hajah should thus be oriented by robust and detailed governance process and assessment, commensurate to the size and business of financial institutions. As the operating environment becomes more complex, so will the Shariah issues.