of the french senate, 14 may, page 3. cf. “ 3rd islamic financial services forum : the european challenge ”, jointly organised with the financial stability institute and hosted by banque de france on islamic liquidity management, paris, 3 march 2009. robin wigglesworth ( 2009 ), “ islamic bonds spark rush of international interest “, financial times, 10 november ; “ has the crisis shown the strengths or the weaknesses of islamic finance? ”, global market monitor, 21 october. norbert hellmann ( 2009 ), “ finanzkrise taucht islamic banking in ein neues licht ”, frankfurt borsen - zeitung, 10 november. durmus yilmaz ( 2009 ), “ islamic finance : during and after the global financial crisis ”, istanbul, 5 october. practically demonstrates the positive diversification effect they could play, contributing therewith to a systemic equilibrium. moreover, islamic finance acts as a natural hedging scheme restricting excessive credit boom in so far as it links the supply of financing ( what would conventional banks call credit ) to the growth rate of the economic activity. thank you very much.

yves mersch : islamic finance – partnerships opportunities between luxembourg and the arab countries speech by mr yves mersch, governor of the central bank of luxembourg, at the 5th economic forum belgium - luxembourg - arab countries, brussels, 17 november 2009. * * * excellencies, governor, ladies and gentlemen, good morning, i am very pleased to be here today, and i would like to thank the arab - belgium - luxembourg chamber of commerce for inviting me and especially its general secretary mr. hijazin. based on the agenda of this 5th economic forum, i am looking forward to hearing and learning and to explore potential partnerships opportunities between luxembourg and the arab countries in the field of islamic finance, which receives an increasing attention. in this perspective, i welcome and consider as essential such conferences that promote greater awareness of important developments within international banking. despite its traditional approach, islamic finance is a key “ innovation ” in the financial area since the seventies and i expect that today ’ s conference will provide an excellent opportunity to exchange information and ideas on current issues relating to this important sector. while efficient reactions to the global financial and economic crisis have been taken by government and central banks worldwide to stabilise the financial conditions of banks and reduce funding pressures, this unprecedented turmoil reinforces the need to revisit our economic and financial paradigm. the crisis suggests to some to deviate from markets driven economies and behaviours and to explore more ethical and humanistic values to drive sustainable value creation. one stream in this context is islamic finance promoting an alignment with the real economy. based on its prohibition of leverage activities, its principles of justice and participation, islamic finance is said to contribute to the reduction of the risk perception in the economy and hence its safe recovery. 1 specialists estimate the volume of islamic investments to exceed usd 750 billions and the pool of investible assets in the countries of the persian gulf and south east asia to reach usd 5, 000 billions. 2 in this part of the world, a non negligible part of the european population has ethical investment and placement needs based on the shari ’ ah that have, so far, not yet appropriately been addressed by the conventional banking offering. as of today, more than 38 millions muslims live in europe, representing more than 5 % of the population. 3 government and financial institutions alike try to cater for these needs. intrinsic difficulties for islamic financial institutions remain however related to the management of their liquidity and i will review how central banks, have engaged into different initiatives to