In considering the ECB’s response, it is important to recognize that the euro area is largely a bank-based economy. The ECB’s response reflected this circumstance. Prior to the crisis, monetary policy mainly comprised adjustments to the policy rate. The crisis disrupted the transmission mechanism. Banks became reluctant to borrow from, and lend to, other banks; the interbank market broke down.
This leads to a lack of homogeneity for some products on the one hand, and a lack of uncertainty by clients as to whether a product developed in one jurisdiction is Sharia compliant in a neighbouring jurisdiction. Islamic financial products need some level of harmonisation in terms of product features to gain mass acceptance.