freedom for the humanity. the agreements we reach today will constitute the building blocks of our inspiration. distinguished guests, since the last quarter of 2008, the impact of the global financial crisis on the world economies surfaced quite rapidly and destructively. the deterioration in risk perceptions destroyed banks ’ appetite to extend credit to the real sector. sharp declines in asset prices and households ’ expectations led to a swift rise in precautionary savings. conditions worsened rapidly in labor market and job losses have reached levels never seen since the great depression. unprecedented policy reactions to crisis taken by government and central banks worldwide have managed in stabilizing the financial conditions of banks and reduced funding pressures. thanks to the decline in counter - party and liquidity risks and the ease of tension in international markets, emerging market equities have rapidly gained ground, bond spreads have narrowed, and volatility in exchange rates came down. commodity prices have rebounded from their recent low levels. capacity utilization ratios and industrial production have globally recovered compared to the first quarter of 2009. however, taking into account the loss of confidence and the size of the damage financial institutions and households have suffered, the fragility in the financial sector and reluctance in consumption and investment is likely to continue in the near future. despite recent signs of revival in global economy, the pace of economic activities remains weak. problems prevail in the credit markets. unemployment rates keep rising. in summary, all indicators point to a recovery, which is slow, gradual and painful. distinguished guests, global problems require global solutions. quite often, changing an existing system is more difficult and expensive than forming a new one. it is obvious that this ongoing crisis is going to end sooner or later as did previous crisis. the lessons we derived from this experience will lead global decision makers to reconsider their policies. we have already started to observe critical and permanent changes in global financial order. the future of the financial system will be in a much better shape with a pre - emptive approach. the coordination is especially needed in terms of better regulation and supervision of financial market instruments. in order for the mission of the comcec and thus of the organization of the islamic conference to be successful, it is necessary for the decision making mechanisms to acquire a more active and global dimension. the success of the economy policies of the islamic counties under the roof of the comcec depends on the formation of measures to increase trust and establishment of a close cooperation in economic and commercial areas. annual meetings of

going to default on our obligations. in fact, in times of extreme uncertainty and heightened risk aversion, the conditions in private repo markets deteriorate quickly and our operations become more attractive. by not adjusting our risk control framework in a pro - cyclical manner, and therefore by maintaining or even enlarging the collateral available to our counterparties facing greater financial distress, we achieve two policy goals. on the one hand, we facilitate the implementation of a monetary policy stance consistent with the crisis environment. on the other hand, we contribute to restoring the value of certain assets by attributing them a liquidity status that the market would not have permitted. the eurosystem risk position : common misunderstandings let me address en passant two issues that have received attention from some analysts recently. first, some commentators have stated that, since the ecb ’ s balance sheet is expanding and is allegedly taking on large risks, the ecb may be turning into a “ bad bank ”. 3 this argument is based on a clear misunderstanding of the type of operations conducted by the eurosystem and of the risk control measures applied to those operations. the description of the risk control measures and of the specificities of the capital position of the ecb that i just provided should help dispel such misunderstanding. the data have actually confirmed that the eurosystem ’ s financial results have proved resilient to the global financial crisis, and its total capital position has even increased. 4 the numbers i have provided in terms of overall capital and reserves of the eurosystem should help a better understanding of the situation. second, some analysts have tried to show that the eurosystem had taken on too much risk, at the detriment of the ecb major shareholder, by looking at the net balances of individual a minimum aaa rating at issuance by two rating agencies is required. over the life of the instrument, it should retain a second - best rating of at least a –. see, for instance, the interview to t. mayer in faz, 14 june 2011, “ die ezb droht zur bad bank zu werden ” ; m. persson, 8 june 2011, “ europe ’ s bad bank, ” the wall street journal. from 5 september 2008 to 3 june 2011, capital and reserves have increased by 13. 2 % ( from €71. 7 to €81. 2 billion ) and revaluation accounts have increased by 100