By and large products are structured on murabaha principles where funds are allocated for particular projects or finance an asset (such as home ownership and automobiles) in which depositor shares in the project rather than bank profits and to structure ijara (leasing) with appropriate asset backing and legal structures.
This impairment in the bank lending channel creates its own challenges for monetary policy. The third challenge is of longer-term nature and goes beyond recent monetary policy decisions. As the on-going recovery remains moderate despite substantial policy support, some observers have recently pointed to the risk of long-term economic stagnation, not just for the euro area but also for some other advanced economies.