They probably do, but given the distribution of financial and real capital in the world, it is likely that the global equilibrium interest rate is to a large extent affected by developments in the US, the EU and Japan. However, viewed from the perspective of a very small, though very open, economy such as ours, it is clear that equilibrium interest rates and required returns do not reflect specific Norwegian conditions, but are determined externally, and we must adapt to this situation as well as possible. BIS Review 46/2003  9
In this connection, a more flexible capital framework that promotes an enhanced degree of capital sensitivity to actual risk intricacies is indeed appropriate for the governance of an Islamic financial institution. An Islamic financial institution's asset profile is characterized by a diverse spectrum of Islamic financing structures ranging from the low risk sales and lease-based modes of finance to the higher risk-equity-based modes. Each of these modes of finance has a distinct intrinsic characteristic dictated by its underlying Shari'ah principles and thus, entails different risk profiles. Ladies and Gentlemen: As the Islamic financial services industry ascends to maturity, it will be desirable to achieve a gradual increase in equity-based finance as this is deemed to be a more equitable financing structure in the eyes of the Shari'ah. It is therefore important to design an appropriate capital requirement that is commensurate with the associated risks. While equity-based finance may involve higher risks and therefore attract higher capital requirements, this, however, should not deter Islamic financial institutions from venturing into equity-based finance. A similar approach is needed to balance between regulatory requirements and financial innovation. Given that the Islamic financial services industry is still in its early stages of development and with the degree of flexibility accorded by the Shari'ah, there.15 vast potential for financial innovation to expand.