in a global context. the recent rise takes place against the background of an increase in financial assets supported by middle - east petrodollars and a growing number of muslims seeking to have their assets managed under religious tenets. an equally important factor that propelled growth in islamic finance is recent advances in financial technologies, namely, structured finance. the islamic finance industry has been able to introduce a scheme of profit sharing instead of prohibited interest payments. this has led the way to the development of a range of financial products, including the islamic bond, or sukuk. islamic finance brings greater diversity the development of islamic finance brings diversity to financial markets and financial transactions. when market players with different sets of values enter a market, they increase the variety of financial transactions, which in turn promotes financial market development and creates business opportunities. at the same time, it has a positive effect on the real economy through more efficient resource allocation. against this backdrop, i have a keen interest in what kind of new financial services islamic finance will provide in the future. to date, islamic finance institutions have provided many products that replicate those of conventional finance while respecting islamic values, where interest, or riba, is prohibited. in other words, islamic financial institutions have successfully provided conventional intermediary functions by utilizing the latest financial technology. i look forward to seeing further developments which will enable islamic finance to carry out new functions that conventional financial instruments can not serve. such innovation will improve the allocation of resources, while operating in accordance with islamic values. there are of course a variety of conventional transactions, but basically, all are a combination of two factors, risk and return. islamic finance is expected to offer further possibilities to finance by adding a new dimension to risk and return, which is islamic values. an example would be the development of microfinance under a framework that places great importance on islamic values such as fairness and equality of social economy and business partnership. islamic finance that offers a broad range of products and services is also important from the perspective of financial market and financial system stability. in principle, in a time of stress, a market with diversified participants and transactions is robust compared to a market of homogeneous participants and limited types of transactions. since the asian currency crisis, asian countries have been striving to create diversity in the source of funds, including bonds, instead of relying heavily on banks. i believe that the growth of islamic finance will also contribute to resolving these problems. challenges ahead islamic finance is making impressive growth and is expected to

of my time, i would now like to conclude my remarks. as i mentioned at the start, japan ’ s economy is likely to continue to face a severe situation for the time being, especially with respect to exports. the bank is determined to support japan ’ s economy as it seeks to return to a sustainable growth path, by continuing to pursue powerful monetary easing with due recognition of the actual situation. in order for japan ’ s economy to regain its strength in the medium to long term and thereby overcome its deflationary trend, it needs to make efforts to end the decline in its growth potential, the fundamental cause of the deflationary trend. the bank hopes that various endeavors will be made so as to enable the economy to take full advantage of the extremely accommodative financial environment. in this regard, this region has long been known for its deep - rooted spirit of entrepreneurship. in a period of large - scale changes, the first step to opening the door to dramatic growth is to accept those changes and view such uncertainties as opportunities to be seized. the bank will continue to support your efforts, so that regional innovation and new business models will inspire and motivate not only the region but japan ’ s economy as a whole. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches