shari ’ ah - compliant investment funds. every tool of the islamic banking has its own contractual nature and features, which differ from other tools in terms of risks, guarantees and pricing. islamic banking services have not been confined to the activities mentioned earlier, but the scope of their transactions has been extended to include other services such as : providing joint finance, issuing banking bonds and opening letters of credit. islamic institutions and banks provide a variety of finance and insurance methods for enterprises, management of financial portfolios, and tawarruq assets ( assets securitization ). moreover, islamic institutions and banks have played an effective role in supporting economic reforms and privatization programs in countries where they work by purchasing shares in listed companies and financing some private activities, thereby helping in supporting the basic infrastructure and financing of housing projects for low and middle income people. they have also contributed to supporting small and craft projects, and indirectly helped in creating many job opportunities for citizens. ladies and gentlemen, the achievements of the islamic banking industry over the last three decades have necessitated the establishment of relevant institutions that support islamic banking such as : the accounting and auditing organization for islamic institutions ( aaoifi ) and the islamic financial services board ( ifsb ). all these organizations aim at creating a sound environment for collaboration and communication among islamic banks and financial institutions by introducing and applying international standards to improve the islamic banking industry and ensure its soundness. let me briefly talk about the necessary requirements to ensure the sustainability, stability and soundness of islamic banking. the islamic financial services board ( ifsb ) plays an effective role in abiding by supervisory requirements for sustainability through issuing supervisory and control standards for the islamic banking system, based on the best supervisory practices in line with basel ii standards, focused on : capital adequacy, risk management, internal control, institutions management controls, transparency and market discipline. the ifsb has urged the islamic institutions to follow specified procedures for assessing their capital adequacy in terms of the nature of risks and pursue strategies to maintain their capital at required levels. it has also required supervisors to review and assess internal assessment measures of these institutions ’ capital adequacy and ensure their compliance with the required capital level and take supervisory measures in case of non - compliance. in addition, the board has urged supervisory authorities to take prudential measures to prevent the decrease of capital to lower than minimum level, and stipulate quick correcting measures in case of such a decrease. stress tests are considered one

for its financial solvency and also won the united nations public service award for the year 2008 for developing sadad ( bill presentment and payment system ). moreover, the kingdom ranked sixteenth among 181 countries worldwide in terms of competition in business and investment performance environment according to doing business 2009 report published recently by ifc and the world bank. given the economy ’ s current position and its performance indicators, it is expected to continue its strong and comprehensive growth in the coming years. custodian of the two holy mosques, inflation, which many countries suffer from, is a global phenomenon and it is also a natural and inevitable result of strong economic growth. in the kingdom, inflation growth rates accelerated to 4. 1 percent in 2007 and to 11. 1 percent in july 2008, but then, it decreased to 10. 9 percent in august 2008. this has posed a difficult challenge due to the contradiction between measures that control inflation, i. e. strict tightening of domestic liquidity and public spending, and the ambitious goals of enhancing economic growth fundamentals that require expansionary fiscal policies to build and complete the various development projects and improve citizens ’ standard of living. after having witnessed low levels of inflation, accompanied by moderate and sometimes low economic growth in the past decades, the economy began to grow strongly in response to restructuring reform policies adopted by your wise government since about seven years. inflationary signs have not shown up until 2006 when the demand side for goods and services began to exceed supply, impacting prices. the wave of high prices worldwide along with high expectations of individuals and institutions have played a role in increasing pressures on available resources and, consequently, higher inflation especially following the considerable improvement in the government income. the phenomenon of inflation has become at the top of your concerns. accordingly, you have instructed the various appropriate authorities and bodies to combat it and reduce its effects on the society, while maintaining the momentum of development achievements. the package of the various procedures, introduced by the government at the beginning of this year, is an appropriate preliminary step aimed at addressing inflation sources that directly affect the society segments who are less able to bear its impacts. as for the monetary policy, the saudi arabian monetary agency ( sama ) has taken steps to control excess domestic liquidity by increasing rates of reserve requirements many times. however, because of the dominance of the fiscal policy over the economy, the greater burden falls on reviewing spending priorities and its programming to be in harmony with the absorptive capacity of the national economy and its ambitious