In this context, it is encouraging to see that the industry itself is taking forward a set of recommendations, set out in the cross-industry report on the “Vision for Real Estate Finance in the UK”, for reducing risks to financial stability from the CRE market. The  5  For evidence on the link between household indebtedness and the severity of recessions, see Cunliffe (2016) and references therein. 6  Mortgage approvals for house purchase may have been inflated by some borrowers bringing forward purchases ahead of changes to Stamp Duty Land Tax levied on additional properties, which took effect from 1 April 2016. 7  See Benford and Burrows (2013). Other countries also experienced CRE booms in the 1980s, most notably Japan. The case of the Mitsui Real Estate Company gives a sense of the euphoria that surrounds such booms. It paid $ million for the Exxon Building in New York even though the initial asking price had been $ million; Mitsui wanted to get in the Guinness Book of World Records for paying the highest price ever for an office building (Kindleberger and Aliber (2005)). 8  See Bahaj, Foulis and Pinter (forthcoming). 4  BIS central bankers’ speeches  report included, among others, recommendations to build a database of each UK CRE loan and its collateral, as well as using long-term valuation measures for risk management purposes. The Bank is very supportive of these initiatives – and is working with industry to take them forward.
Collaboration between the two countries could be in many forms; for instance Turkish investors and financial institutions could use Malaysia as a gateway to the Asean region. Malaysian financial community could use Turkey as a base to Central Asian region and Europe. In the area of Islamic finance, Malaysia is committed to be a partner with Turkey to further promote the business prospect in this country. Malaysia being an Islamic financial hub in Asia is willing to share with Turkey our 30 years of experience in developing its Islamic  2  BIS central bankers’ speeches  financial industry and our knowledge and insights in operating an Islamic financial system that runs parallel with its conventional counterpart. Potential Turkey-Malaysia partnership in Islamic finance There are vast opportunities for Turkey-Malaysia bilateral cooperation, however let me mention five key areas of possible cooperation that could increase cross-border activities between our two countries. These are in the area of sukuk issuance, promoting cross-border activities, Islamic fund management, partnership in innovation and in education and research. Firstly, in the area of sukuk issuance, we welcome Turkish financial and business community to use Malaysia’s comprehensive and tested infrastructure with its extensive investors network as a platform to raise funds such as sukuk and Islamic syndication financing. The multi-currency sukuk market in Malaysia is well developed and active with over 60% of the outstanding sukuk in the world originating from Malaysia.