competitive position of the takaful operators, while meeting the needs of the nation. this includes providing the foundations for the development of the financial markets and strengthening the institutional development. as part of this process, the benchmarking exercise is an important tool to enhance performance and to guide the takaful operators on improvement of their business strategies. to reinforce this, a service quality index has also been initiated to promote the development of worldclass products and services. this is also complemented with a comprehensive consumer education programme so as to promote product transparency and increase accountability. the introduction of financial advisers is also a further element to facilitate consumer access to a wider range of financial products. amongst the most imminent challenges is the creation of the critical mass in the market to allow for meaningful cross - border alliances at the regional and global level. the establishment of an adequate number of takaful operators in the market is also crucial to provide the groundwork for the setting - up of more retakaful operators, in terms of sustaining business support and providing the economies of scale in order for the retakaful industry to develop. currently there is still a dearth in the number of players providing the retakaful facility, resulting in takaful operators ceding to conventional reinsurers. while this has become a common practice, ideally more competitive retakaful operators who provide reinsurance in accordance with shariah principles need to be established so that the takaful industry would not be dependent indefinitely on conventional reinsurance as the conduit to which they can mitigate risk. more importantly, retakaful operators ultimately serve to strengthen and enhance the financial capacity of the takaful industry, and the synergistic by - products emanating from the interactive business alliances would contribute towards the overall betterment and robustness of the islamic financial system. indeed, there is much to be gained by the takaful operators in particular, and the islamic financial industry in general, by having access to an adequate and competitive market of the retakaful facility. it is therefore important to increase the collaborative efforts and examine plausible ways to address this gap in the takaful industry. our quest to create a dynamic islamic financial system is to achieve the ultimate objectives of developing an islamic financial system that will be able to contribute significantly to the overall development of our economy through the intermediation process. thus, islamic banking and finance industry needs to extend its agenda towards the development of a comprehensive islamic financial system. the islamic

acting as a coordination centre and ensuring the consistency of national policies, making use of the entire range of instruments created by the eu, such as centralising the optimisation of the aggregate ’ s path by monitoring spillover effects on its constituent parts. this is, unsurprisingly, a paradigm shift : it entails moving the focus from financial or regulatory instruments to policies. until now, the eu tended to believe that it was enough to create instruments, as they would induce policies, as was the case of the european social fund and the european regional development fund. however, those same instruments served / induced different policies and consequently, different efficiency levels for both the parts and the whole. this should be viewed from the opposite perspective : instruments do not induce policy optimisation ; policies require and warrant the use of instruments and, as such, they should be employed according to the policies ’ level of consistency with the general interest. the fourth message that i would like to convey is that responsibility for compliance with fiscal rules should lie with an independent entity. national budgets are a matter of common interest, given that the debt sustainability principle is an integral part of the institutional principles enshrined in the treaties. as a constituent rule in the eu, it must be safeguarded while ensuring its independence, technicality and neutrality. i therefore believe it is crucial to establish a central independent entity capable of assessing and issuing reasoned opinions on the fiscal adjustment path followed by member states – a european “ public finance council ”. this “ public finance council ” would gauge national policies ’ compliance with the emu ’ s self - imposed rules, but it would not interfere with political choices, provided that they were compatible with long - term sustainability. this means that if a country prefers to adopt an approach that favours equality over efficiency – defining efficiency as public expenditure yielding returns – it would not be bound by an obligation to follow a sustainability path. however, we must bear in mind that the sustainability path would not be the same. it is crucial to reach a balance between two situations at opposite ends of the spectrum, both of which unfeasible : ( i ) to grow in the future without creating conditions for consensus in the present ; and ( ii ) creating conditions for consensus now, but neglecting future economic growth. the nature and quality of national policies affect a country ’ s potential output and, consequently, the political room for manoeuvre within the rules. any policy measure identified as necessary in the scope