small commercial banks, - ( ii ) large commercial banks tend to be financially stronger than large islamic banks, - ( iii ) small islamic banks tend to be financially stronger than large islamic banks. “ islamic banks and financial stability : an empirical analysis ” prepared by martin cihak and heiko hesse ( january 2008 ). the analysis is based on evidence covering 77 islamic and 397 comparable commercial banks in 18 banking systems with a substantial presence of islamic banking, over the 1993 - 2004 period. one of the plausible explanations given by the paper is that it is significantly more complex for islamic banks to adjust their credit risk monitoring system as they become bigger. given their limitations in standardisation in credit risk management, monitoring the various profitloss - arrangements rapidly becomes much more complex as the scale of the banking operation grows. these findings are based on evidence drawn from banking systems with a substantial presence of islamic banking. therefore, they are not strictly transposable to france. nevertheless, precisely because france is a conventional environment, i would like now to conclude my speech with some remarks on conditions islamic banks need to meet to ensure that their establishment in france offers sufficient safety for their customers and is compatible with the smooth functioning of the french banking system. this is primarily in islamic banks ’ own interest and is also in the interest of the banking system! regarding licensing, the credit institutions and investment firms committee ( comite des etablissements de credit et des entreprises d ’ investissement – cecei ) will assess the same criteria as for any conventional bank : financial resources and suitability of the shareholders ; integrity, qualifications and suitable experience of managers ; level of own funds ; business plan ; capacity of the bank to achieve its development objectives and so on. indeed, there is no specific criteria or requirement for islamic banks in the french licensing framework. but beyond these standard licensing criteria, banking authorities need to ensure that islamic banks will interact with their conventional environment in france as soundly as possible. therefore, some key issues need to be tackled before licensing an islamic bank, regarding especially : - their governance, with for example the role of the shariah ’ board, - the legal classification of profit - sharing investment accounts and its consequences in terms of coverage by the french deposit guarantee scheme, - and liquidity management and access to the eurosystem funding, especially the issue of assets eligible as collateral. let me stop here. i would like to thank you very much, ladies and gentlemen, for your

looking at the recent release of the ecb survey of professional forecasters, there is an upward trend in inflation expectations over the medium to long term. but, as shown by the us experience, re - anchoring inflation expectations takes time. the eurosystem is ready to go further if necessary to deliver on its mandate of maintaining inflation close to but below 2 %. but monetary policy will be more effective if, at the same time, governments increase the potential growth rate by implementing ambitious structural reforms. bis central bankers ’ speeches