The 15 per cent risk weight floor is a welcome initial step in partly compensating for the higher loan-to-value ratios of households in relation to disposable income and lower amortisation levels, which could lead to high credit losses ahead. In my opinion, however, risk weights for mortgages need to be raised even further. Not least to better internalise the external effects associated with such lending – for example, the risks to financial stability which may ensue from the drop in consumption of highly indebted households in the event of a decline in house prices. We also need measures which strengthen the buffers of households and contribute to curbing credit growth in the household sector more permanently. It would be preferable if the banks themselves took the responsibility for sounder lending practices. But, if this does not happen soon enough, and forcefully enough, then the authorities must intervene.There are many so-called quantitative regulations which can be used for this. The mortgage cap introduced by Finansinspektionen can be adjusted, and limitations can be introduced on the size of a loan in relation to the household’s income. Another tool is introducing an amortisation requirement, which directly reduces household indebtedness. I believe that, in the current situation, separate amortisation requirements should be considered to supplement the existing measures. Stricter credit terms can also be achieved with so-called qualitative measures which affect borrowing capacity. It would then be a matter of tightening banks’ credit assessment procedures, which can be done in several ways.
Takaful agents can play a key role in reaching out to this broader market, particularly by understanding the takaful products, and being able to explain them simply without diluting the distinct value propositions of takaful. Part of this will require greater acumen and empathy on the part of agents for the diverse needs and preferences of customers from all walks of life. But it is also about developing long-term strategic value: By being well-versed in both fields, agents stand to position themselves as an authoritative voice in advising both takaful operators and insurance firms in relation to the changing trends in the demands and needs of consumers and product features that would better cater to these. 3/5  BIS central bankers' speeches  Embody what you sell I’ve spoken at length about the tools and methods that can help sharpen the niche of takaful agents as they enter a new, potentially disruptive phase in the industry’s development. But my final point makes a recourse back to unchanging core of this profession: In particular, the values embodied by takaful. The very existence of this industry rests on the ultimate objective of attaining the well-being of mankind as called for in Islam. Takaful agents, being an essential part of this ecosystem, must embody their role as ‘wakeel’ of takaful to the highest standards. Trust, honesty and fairness are values that I am sure everyone in this room seeks to exemplify in all their dealings with customers.