in the united states ; they generally could not do both. whether the affiliation of insurance underwriters and banking organizations will become more common is unclear. insurance underwriting involves a much larger commitment of resources than insurance sales and, apart from underwriting credit insurance, seems so far to have little synergy with banking. banks and insurance companies so far seem not to have determined whether it makes business sense to mesh the manufacturing and distribution of insurance with the manufacturing and distribution of more traditional banking products. the experimentation has begun in ways you would expect. for example, insurance companies have long thought that the trust and fiduciary powers of banks would offer them an opportunity to manage insurance payouts and other assets of large estates. and a few banking organizations are experimenting with manufacturing the insurance products they deliver. these trial runs need time to work themselves out. what is important is that federal law no longer prevents the marketplace from evolving and the industry from experimenting. the result can only be beneficial to consumers. with these developments have come new supervisory challenges. as i mentioned earlier, we at the federal reserve have little expertise in supervising insurance companies. while some types of risks are common to both banking organizations and insurance companies, the products, business practices, and historical framework of the insurance industry are unique and outside our experience. similarly, the risks and operations of banks and bank holding companies, which are in our area of expertise, are quite different from those typically seen in the domain of insurance supervisors. the obvious supervisory approach suggested by these different risks and regulatory schemes is cooperative functional regulation that matches supervisory expertise with the risks encountered by the regulated entity. this cooperation and a functional regulatory scheme are required by the glb act. but they also make good supervisory and business sense. it is crucial that supervisors talk to each other in order to understand the risks posed by functionally regulated entities, one to the other. it is also important that supervisors not overburden organizations with duplicative and conflicting regulation that destroys the very cost savings and consumer benefits of affiliation. consequently, we do not examine insurance underwriters or the insurance agency business of bank holding companies. instead, we defer to the appropriate state insurance authorities. we also rely on reports and other information that insurance companies provide to state insurance authorities to understand the activities and financial strength of the insurance company, rather than imposing our own reporting requirements on insurance companies. importantly, we have established very successful partnerships with the national association of insurance commissioners ( naic ) and with many state

in - hand to design a better institutional arrangement, tools and instruments to promote effective monetary and macro - prudential policy. in line with that, it is also agreeable that the high level committee of the islamic financial services board ( ifsb ) members called for the islamic financial system to strengthen regulatory and liquidity infrastructures as well as building a healthy and beneficial linkage to the real sectors. bis central bankers ’ speeches excellencies, ladies and gentlemen, besides all the advances in monetary and macro - prudential policies to strengthen financial stability, we are at the stance that structural policies is also crucial in supporting financial system resillience. lesson from the 1997 / 1998 crises, we learned that micro and small enterprises were relatively resistant to economic shocks, giving significant contribution to financial and economy recovery. hence, structural policies need to be promoted to advance wealth distribution to more people, particularly low - income class. in regard to this concept, islamic social sector that covers zakat and awqaf systems can play very important role in accelerating economic development and supporting financial stability. in indonesia, as studied by bank indonesia ’ s researchers in 2012, total of all zakat potential from various sources is approximately rp217 trillion or equivalent to usd22. 6 billion. this number is equal to 3. 4 % of indonesia ’ s 2010 gross domestic product ( gdp ). however, the realisation of those potential zakat is still below our expectation. recent data recorded only rp2. 7 trillion or 1. 2 % of total zakat potential has been received. this is our home - work to explore ways to boost this number. unlike the other commercial sources of fund, the zakat funds would never cause unnecessary burden to the economy since the type of the funds is not commercially claimable, and hence, no excessive social cost will occur. the same also goes to the awqaf sector where, as a matter of fact, more people are endowed with low cost assets. again, potential benefits from those assets has not been materialized yet, because most of the assets are still poorly managed. based on data from indonesian awqaf board, awqaf land has now reached not less than four billions of meter square, a very significant source if we can optimized them. with this huge potential of zakat and awqaf land, we can expect a significant drive to economic development. i personally believe that these ideas are in - line with those of the governments, as well