to emphasize the greater effectiveness achieved when coordinating fiscal and monetary policies. what can we say about economic policy? i think, in this respect, there seem to be better outcomes. quite a number of lessons were learned at various levels : 1. regarding the importance of financial stability as an objective. 2. regarding the position of the countercyclical ( fiscal and monetary ) policy. 3. regarding the need to create protection buffers, both in terms of liquidity and solvency. 4. regarding the relevance of coordination of economic policy. moreover, the value of immediate action, without relying too much on automatic stabilizers, has proven to be essential. besides, it was necessary to be forceful ( and even overact ) in order to overcome economic agents ’ negative expectations. for an appropriate international policy coordination, to avoid the temptation to act selfishly was key. instead of confining economies and failing to cooperate, we globally avoid “ beggarthy - neighbour ” protectionisms, through action at g - 20 and other fora. but there is yet another lesson as regards to timing : policies implemented should never be prematurely abandoned. several authors pointed out how the reversal of the united states'expansionary fiscal policy in the mid 1930s was a setback for recovery. moreover, it delayed the efforts to bring the economy back on the long - term path, which only happened in 1942. of course, being careful so as not to frustrate the recovery does not mean we should run unnecessary risks in the opposite direction. the monitoring of potential ( non - linear ) reversals especially in inflationary expectations must be ongoing. economics is a dynamic discipline. two years ago, many of our colleagues were worried about inflationary pressures derived from the booming commodity, real estate and stock markets. the adjustment process started in the real estate market which, together with the subprime meltdown, caused fears to take the opposite direction : a deflationary environment would most likely be created. massive interventions around the world, through fiscal and monetary tools largely reduced the risk of deflation. however, even today, when activity is showing signs of improvement, in some markets the fiscal and monetary policy exit strategy may tip the scales either way. while an early exit could affect the recovery, a late exit could fuel inflation, which would bring uncertainty in terms of employment and economic activity. it would be senseless to consider only two extreme scenarios : going back to the 1930s or the 1970s. both episodes have provided economic theory

. global economic challenges and islamic finance the world is transforming and its transformation is way beyond what we had seen before. this is an era of radical change, new rules are being formulated, standards and best practices that were in vogue hardly 5 years are now considered insufficient. it is changing at a scale and speed we had never experienced before, that require us to accelerate our own pace of transformation, to enable us to survive and prosper under this “ new normal ” operating environment. the world is currently faced with wide - ranging challenges that include among others – excessive indebtedness, at household businesses and at sovereigns. many are grappling at finding the solutions to overcome the complex issues facing them today. some of the problems look uncannily similar to what we had faced in the 1990s, but the solutions might be different this time. but whatever that solution might be, we must never discount any probable answers including unorthodox measures. experience during the asian financial crisis had shown that unconventional measures could very well be the future best practices. but then, yesterday ’ s solution may no longer be adequate to address today ’ s challenges. therefore, we must endeavour to search for new alternatives bis central bankers ’ speeches and embark on new ventures that could mitigate the contemporary issues and challenges confronting us. and this is where islamic finance can fit in and play a meaningful role. as an objective, we need to build the foundations for a stronger and more inclusive global economy with sustainable growth and greater shared prosperity by all. this objective is in fact fundamentally in line with the role and relevance of islamic finance. islamic finance emphasises on attainment of socio - economic goals espoused on shariah objectives. it emphasises on a strong linkage to productive economic activity to generate legitimate income. it also emphasises on accountability, fairness and transparency. all these reflect the fundamental values propagated in islamic finance that could serve as a stable and resilient form of financial intermediation. when islamic finance is applied in an appropriate and structured manner, it has a strong prospect to serve as a contributor to a sustainable global economic growth and financial stability. the infrastructure already established in islamic finance today is ready to serve as an effective intermediary for the conduct of global business including promoting greater intraregional trade not only within asia but between the various regions of emerging markets. with more than 600 islamic financial institutions that now operate in more than 75 countries, growing at an annual rate of about 15