It prompted responses across the full range of Reserve Bank policies, including monetary policy, liquidity management and prudential policies. Many of these responses were short term in nature but there have also been important long term policy consequences. Indeed, in the prudential policy area, there is significant policy change still yet to come from the strengthening of international standards under the “Basel 3” initiative.
Owing to the Sharia prohibition on speculative activity and the requirement that financial transactions be backed by real assets, the Islamic financial industry has been less affected by the global financial crisis than the conventional sector.