we ’ ve seen over recent years. the fundamental mechanisms have not changed. at the same time, it is clear that we need to act with great care as our interest rates are already negative and we ’ ve already built up a large portfolio of bonds. so why is inflation reacting so little to your monetary policy? we see that wages are rising, particularly in germany. for some time, prices followed suit. but companies are now facing huge uncertainty, due mainly to brexit and the trade conflicts. this is why they are reluctant to pass on the increase in labour costs to their customers. i have a technical question in this context. the ecb is only permitted to buy around onethird of the government bonds issued by each country. some economists have calculated that, with new purchases of €20 billion each month, you will already reach a limit, primarily in germany, after less than a year. according to our calculations, this may not become a problem for an extended period of time, and in any case not for at least as long as we can project bond availability conditions with some confidence. it is important to keep in mind that the forecasts depend on many parameters you assume. one of these is the price elasticity of those investors who hold the bonds in the private sector. building on past experience, these investors have proven more willing to sell, even in response to relatively small price adjustments, than we had anticipated. this makes our life easier as it eases constraints. for some time to come means that you believe the limits for germany will not be reached in the next one to two years? if we had seen any potential constraints in this regard in the near future, we would have included this in the calibration of the additional purchases. do you assume that some countries will increase their debt? no, such considerations do not play a role in our calculations. we work on the basis of whatever the governments have already agreed. if the limit is reached, the ecb could of course also deviate from the key according to which purchases are weighted by the size of the respective euro area countries. we will continue to purchase with a view to bringing the share of the pspp portfolio into close alignment with the respective national central banks ’ subscription to the ecb capital key. some critics also accuse the ecb of effecting its monetary policy primarily via the exchange rate. the sole objective of our monetary policy is to fulfil our mandate of maintaining price stability. the exchange rate

markets – or at least they should be : one of the lessons of the present financial crisis is that too little attention has been paid to them. this is not to suggest that islamic finance is without source : bloomberg. source : " islamic inroads " by asiarisk, february 2009. source : " sukuk market declined sharply in 2008, but long - term prospects remain strong " by standard and poor's, islamic finance news, 6 february 2009. risk – indeed many of the risks inherent in islamic finance are similar to those of conventional finance, and, in fact, islamic financial institutions may be subject to other unique risks from the liquidity and operational perspectives. but islamic finance introduces an alternative form of financing, and one that offers many opportunities particularly when financial market conditions start to improve. from the perspective of hong kong, we are optimistic that the coming together here of islamic finance with development opportunities in neighbouring asian markets and china will provide an exciting growth stimulus for financial market participants. a key part of the government ’ s strategy for developing hong kong as an international financial centre is a focus on islamic finance. in support of this initiative, the hkma, in collaboration with the treasury markets association ( tma ), has devoted considerable time and resources into establishing an appropriate infrastructure framework and developing an education and awareness programme both locally and worldwide. although we are still in the infant stages of development, we have accumulated some experience, which i would like to share with you today. first, since it is now such a hot topic to talk about change, i trust that you will agree with me that islamic finance, at least for jurisdictions like hong kong, means change – a change in perception, a change in skills, a change in structures and techniques, in contracts, standards, and so on. change, in all its many forms, is happening within the global islamic finance arena, even as we speak. in the past year or so, we have seen the inception of several standardisation initiatives for islamic financial documentation, spearheaded by international institutions like the islamic financial services board ( ifsb ) and the international islamic financial market ( iifm ). this form of change is significant towards facilitating harmonious practices, providing greater clarity for the islamic financial services industry and thus acting as a boost to the development of global islamic financial markets. there have also been many exciting developments in the new markets for islamic finance in asia, where there is a growing tendency for sukuk issuance, such as the sovereign