with large - scale purchases of government bonds, especially. but our experiences with new instruments have also been positive. [ 15 ] amongst other things, a bundesbank study confirms that forward guidance has successfully steered long - term interest rates in the ecb governing council ’ s desired direction over the last few years, thus probably helping to support euro area economic activity. 5 climate change and central banks ladies and gentlemen, as part of the strategy review, we will also tackle the question of what role central banks should play when it comes to climate action. climate change and climate action have indeed been attracting growing public attention of late. one thing is clear : climate action is a matter for elected governments and parliaments. they have the right tools at their disposal, such as taxes on co2 emissions or emissions trading. and they have the necessary democratic legitimacy to use them. but it ’ s equally clear to me that central banks can and should do more about climate change than they have up to now. climate change and climate action can have economic repercussions that are relevant to maintaining price stability. monetary policymakers must factor this into their analyses. central banks are often just setting out on this journey. that ’ s why we must first gain a clearer understanding of how far climate change and protective measures affect the economy and the financial system. both climate change and the transition to a less carbon - intensive economy may entail risks not only for enterprises in the real economy, but also for the financial sector. these climate - related financial risks need to be considered : first, it is up to credit institutions to incorporate such risks into their risk management. in turn, central banks, in their role as banking supervisors and guardians of financial stability, must ensure that this is also carried out appropriately. but we shouldn ’ t ( tonne ) just point the finger at others. in terms of the standards to which we are holding credit institutions here, we, as central banks, should practice what we preach. all the more so since, basically, our financial assets can be just as exposed to financial risk as those of commercial banks. i believe that central banks should likewise factor climate - related financial risks into their risk management. [ 17 ] and that should also go for our monetary policy operations and securities portfolios. on the other hand, i do not believe that preferential purchases of “ green ” bonds along the lines of “ green qe ” are the answer. when purchasing assets, we must stick to our market economy

takaful industry and the need to increase awareness among traders on benefits of trade credit protection. global large infrastructure financing needs the third and final trend that i would like to highlight today is the large infrastructure development taking place to cater to the needs of increasing global population. global infrastructure development financing needs is expected to reach usd94 trillion by 2040 and close to usd52 trillion in asia alone 7. the one belt, one road initiative by china or recently known as the belt and road initiative – that covers areas primarily in asia and europe – would add a further usd1 trillion to financing needs in the region over the next 10 to 15 years. this opens up another area of opportunities for islamic finance. islamic finance has strong potential to mobilise funds for infrastructure and development needs all around the world – by exploring opportunities – to structure innovative funding modalities for infrastructure financing. the recent issuance of the world ’ s first green sukuk to fund a solar project in sabah that amounts to rm250 million – is an example of an innovative financial instrument to tackle global infrastructure needs and green financing, at the same time. enhanced collaboration with global islamic finance players and multilateral development 3 / 4 bis central bankers'speeches institutions could also strengthen syndication capabilities, and expand investor base. as a start, malaysia ’ s role as one of the founding members of the asian infrastructure investment bank – opens up new avenues for domestic islamic financial institutions – to leverage on its extensive network, institutional expertise, and its good track record to reach out to more diverse investors. in closing, i would like to again mention that as islamic finance enters the mainstream – the road ahead requires islamic finance to seize opportunities in new growth areas and to deliver its promises. this requires greater positive impact by islamic finance beyond its shareholders and immediate stakeholders – to also benefit the society ; environment ; and the broader economy as a whole. thank you. 1 ifsb islamic financial services industry stability report 2017 – 18 countries out of 35 countries tracked by ifsb. 2 bnm islamic finance handbook december 2016. 3 international finance corporation. 4 the world bank – feature story 2016. 5 the world bank – feature story 2016. 6 bnm islamic finance handbook december 2016. 7 thomson reuters business news 25 july 2017. 4 / 4 bis central bankers'speeches