to be around 2 percent this year. the difference between last year ’ s numbers and this year ’ s forecast has caused some concern, and that ’ s where i ’ m going to keep my focus. many people are hoping for gdp growth of 3 or 4 percent, similar to what we saw in the late 1990s. less optimistic forecasts for 2019 growth are therefore, understandably, a source of worry. but it ’ s key to remember that this gdp growth is taking place on a backdrop of historically low unemployment, and low, stable inflation. unemployment is at 3. 8 percent and inflation continues to run just under 2 percent. 1 / 3 bis central bankers'speeches the fed is tasked with two goals : low and stable inflation and maximum employment. from the perspective of monetary policy things are going very well. and the economic fundamentals indicate that slower growth is — far from a sign of doom and gloom — what we should expect. the economic fundamentals the 3 percent growth of 2018 was boosted by a number of tailwinds. strong global growth, fiscal stimulus, and accommodative financial conditions all helped drive gdp growth and a tight labor market. these tailwinds have calmed, and in fact reversed in some cases. three developments contribute to this view : a downturn in global growth, heightened geopolitical uncertainty, and the effects of tighter financial conditions. if you strip away these factors you ’ re left with the underlying drivers of potential growth, which are demographics and productivity growth. both of these have slowed significantly. baby boomers are retiring and fertility rates have come down, which has significantly slowed labor force growth relative to past decades. productivity growth has also fallen considerably from the boom years of the late 1990s and early 2000s. i put the potential growth rate of the u. s. economy at about 2 percent, which is in line with the forecasts we ’ re seeing for this year. of course, a number of different scenarios could play out. geopolitical uncertainty and other factors holding back growth may recede, and the u. s. economy could resume the robust trajectory of last year. or gdp growth could continue closer to trend, which is my own forecast. finally, there ’ s always a chance that downside risks could knock gdp growth off course. but what the data ’ s telling us is that this period of slow growth isn ’ t an aberration — it ’ s the “ new normal ” we should expect for the foreseeable

future earnings and apply shariah - compliant risk mitigation techniques at an early stage so as to manage the volatility in returns to ensure stable and competitive income to depositors. similarly, applications of risk - based models allow islamic financial institutions to conduct stress testing, sensitivity analysis and simulations based on multiple scenarios to take into account all possible potential outcomes that may occur. this will enhance the capacity of islamic financial institutions to better anticipate the possible impact of financial shocks on future earnings and hence formulate contingency plans leading to a more effective and efficient asset and liability management. in addition, it - based risk management systems would strengthen the capacity of islamic financial institutions to effectively manage the segregation of demand deposits, restricted and unrestricted investment accounts and shareholders funds in accordance with their distinct investment objectives and risk tolerance. the mapping of financial performance of assets with risk - adjusted returns to these specific classes of investors will lead to enhanced accuracy and transparency in the determination of returns. in addition, as returns in islamic banking are uncertain and can only be ascertained on an ex - post basis, well - developed it systems can equip islamic financial institutions with the ability to make projections on future returns to reduce the degree of uncertainty in the returns to be paid to the depositors. this would enhance credibility and strengthen the competitiveness of the islamic financial industry. conclusion the future prospects of the islamic financial services industry will be the result of the combined efforts of all the relevant entities in the financial sector - the industry, the regulators, the market participants and the international community. these collective efforts need to be galvanized as a coordinated and concerted effort to maximize the potential for the industry. evolving the shared vision and common goal to be achieved will be an important first step. of greater importance will be the actions that need to be taken to make this happen. it will be our actions and initiatives taken today that will contribute towards determining the future that we aspire.