Like conventional banks, Islamic banks also need to be effectively regulated and supervised. Their strength and soundness are unequivocally as critical as for conventional banks. However, the nature of risks associated with Islamic banking business brings forward an array of issues in risk measurement, income recognition, adequacy of collateral and disclosure standards.
Recently, the European Court of Justice has confirmed that the ECB can deploy any available instrument, unless explicitly ruled out by the Statute, to ensure price stability. If risks to price stability arise, we have to use all the tools that are legally available to us.