charged with the responsibility of assisting in the promotion of foreign trade especially in capital goods, among member countries ; providing technical assistance to member countries ; and extending training facilities for personnel engaged in development activities in muslim countries to conform to the islamic law. ladies and gentlemen, in the turkish context, the islamic finance practices are embodied in a uniquely defined compartment of the banking system. these banks are called as the “ participation banks ” in turkey and they constitute an integral part of the turkish banking system. there are four islamic banks categorized as participation banks, and 45 conventional banks in turkey as of september 2009. it is crucial to highlight that the participation banks are not considered as an alternative to the conventional banks. while they are functioning similar to deposit banks, their fund collecting and lending processes differ significantly. participation banks are authorized by the turkish banking act to collect funds from the public under the “ profit and loss participation accounts ” and the “ special current accounts ”. the profit and loss participation accounts are essentially a version of the islamic financial instrument, where the bank utilizes the funds deposited by account holders to fund specific business activities. any profits earned are shared between the account holder and the bank, in proportion to an agreed ratio. participation banks in turkey mainly offer two types of lending. the first type of financing is murabaha, which is a transaction consisting of two sales contracts. the first contract involves a bank client requesting the bank to undertake a murabaha transaction and promising to buy the commodity specified by him or her if the bank acquires that commodity. the second contract involves the client purchasing the commodity acquired by the bank on a deferred payment basis and agreeing to a payment schedule. the second type of financing is financial leasing or ijara, with terms similar to those offered by other leasing companies. participation banks currently constitute only a small part of the turkish banking sector, accounting for 3. 7 percent, 4. 2 percent, and 5. 2 percent of total banking sector assets, deposits, and loans, respectively, at the end of 2008. however, they have been expanding rapidly in recent years. the share of participation banks ’ assets in total banking sector rose from 1. 9 percent in end - 2002 to 3. 7 percent in end - 2008. they have provided finance to mainly small and medium size dynamic firms. at present, participation banks are regulated according to the same standards as conventional banks. accordingly, they are regulated and supervised by the banking regulation and supervision agency. distinguished guests, while

, on the other hand, can amplify or spread shocks throughout the system. and just as periods of uncertainty can test price stability, they can also test financial stability. 1 / 6 bis - central bankers'speeches the bank's approach to monitoring financial stability takes a broad view. canada's financial system is made up of a complex network of institutions, including banks and credit unions, pension funds and other asset managers. and many of our largest institutions operate globally. 1 we monitor the financial system for risks and vulnerabilities. vulnerabilities are weaknesses that often build over time and can make the system more susceptible to stress. they exist in almost any system. and, on their own, they may not lead to financial stress or instability. for that to occur you generally need a trigger - an event, or shock - whose impact can be amplified by the presence of vulnerabilities. it's the combination of these two things that can lead to periods of financial instability or, in extreme cases, a financial crisis. we use the information we gather in our monitoring to conduct research, inform policy decisions and communicate with canadians. we publish a report each spring and give an update each fall - both of which talk about global and domestic conditions and the state of the canadian financial system through the lens of the risks and vulnerabilities i just spoke of. and i am pleased to announce that today we launched an interactive dashboard of financial vulnerability indicators on our website. 2 we're sharing information on what we monitor to help people better understand the vulnerabilities we all face. the uncertain world we live in so, let's turn to an update on global financial conditions and the environment we're in today. it's an understatement to say that the past few years have seen major global economic changes and financial system developments. first, we are emerging from two years of a global pandemic and the resulting health and economic impacts. less than a year has passed since canada's economy fully reopened, and parts of the world - china, most notably - are still enduring lockdowns. this has had a dramatic and enduring effect on both supply and demand. as a result, inflation has risen in most countries around the world. in response, central banks have shifted rapidly to tighten monetary policy to bring inflation down. as interest rates rise, financial conditions are tightening, liquidity is scarcer, and risk assets are repricing. second