and p. lowe ( 2002 ), asset prices, financial and monetary stability : exploring the nexus ”, bis working papers, no. 114. bordo, m. and o. jeanne ( 2002 ), “ monetary policy and asset prices : does “ benign neglect ” make sense? ” international finance, 5 ( 2 ). adrian, t. and h. s. shin ( 2008 ), “ financial intermediaries, financial stability and monetary policy ”, paper presented at federal reserve bank of kansas city ’ s symposium, jackson hole, august 2008. leverage. given the interlinkages existing in the global system, today this is true not only in the anglo - saxon systems, but also in the more bank - oriented european context. therefore, while monetary policy should continue to focus on delivering price stability, it should aim at a greater symmetry throughout the cycle and cannot afford to neglect the modifications and innovations affecting the structure of the financial system. we should not, however, underestimate the enormous informational challenge we have to confront. we need to improve our analyses and tools to be able to better assess the risks of a systemic crisis, quantify the effects that our actions may have to mitigate those risks and develop a deeper understanding of the two - way linkages between the financial and real sectors. in this respect, a closer interaction between macroeconomic and macroprudential analyses is essential. this requires stronger cooperation and information sharing among authorities both domestically and cross - border. moreover, greater transparency and improved disclosure practices in the private sector are necessary to be able to fully assess the conditions of the financial system and formulate the appropriate monetary policy. in this sense, monetary policy and policies to achieve financial stability are closely linked. the crisis we are facing is one of the most severe and complex of our times. the challenges will be substantial : restore price stability that would support growth, and ensure that the needed adjustments in bank and households balance sheets and in internal and external macroeconomic imbalances take place in an orderly manner. this will require action on the monetary, fiscal, and regulatory front. it will also require decisive action by the private sector to repair balance sheets, strengthen corporate governance, and improve the functioning of markets. history has repeatedly shown that needed reforms are ignored until a crisis forces action, and that the will to reform quickly dissipates after the crisis has passed. this crisis is no different, and this is an opportunity to strengthen the structure of the financial services industry

the shari'ah framework and islamic accounting standards. however, islamic finance is distinct from conventional financial activities in terms of its underlying philosophy on the prohibition of interest, which in turn shapes the nature of its financial transactions, and its risk attributes. a separate regulatory framework therefore needs to be developed in view of the unique risks in islamic financial transactions to provide for their effective assessment and management. such a prudential regulatory design would further complement concurrent efforts that are underway to develop islamic financial markets and islamic financial instruments. this architecture will contribute towards the development of a robust and resilient islamic financial system that can effectively preserve financial stability and contribute to balanced growth and development. ladies and gentlemen : in recognition of this need, a proposal was made two years ago to establish an organization to spearhead the development of a uniform set of prudential, supervisory and disclosure standards for the islamic financial services industry internationally. this proposal was crystallized and endorsed during a consultative meeting of a group of central bank governors, and officials from the islamic development bank ( 1db ), the accounting and. auditing organization for islamic financial institutions ( aaoifi ) and the international monetary fund ( imf ) in prague in september 2000 during the occasion of the lmf - world bank annual meetings. the endorsement set in motion the formation of a preparatory committee, with officials from bahrain, iran, malaysia and sudan, and representatives from the imf, idb and aaoifi, to develop the terms of reference and operational structure for the islamic financial services board. in a meeting of governors in april this year, malaysia was mandated to lead a steering committee for the establishment and inauguration of the islamic financial services board in kuala lumpur. today's historic event is the culmination of this extensive two - year consultative process. ladies and gentlemen : the islamic financial services board, ifsb will serve as an association of central banks, monetary authorities and other institutions, entrusted to develop and promulgate internationally accepted prudential regulatory standards and best practices. in advancing this mission, the board will examine the extent to which existing international best practices need to be adapted and complemented to be consistent with shari'ah principles. the ifsb will liaise and collaborate with other international standard setting bodies to achieve the common goal of international financial stability. in addition, the board will also focus on the development of risk management instruments, cultivation of sound risk management practices and facilitate the implementation of robust risk control mechanisms in islamic financial institutions through research