The second reason is the strength of the sterling exchange rate, or more particularly the weakness of the euro for most of the time since its introduction some 3½ years ago. The frustrating thing for us has been that that there was very little that either we at the Bank or the UK Government could do directly to address the problems at source. That's fairly obvious when we are talking about the weakening of domestic demand in other major countries. It's perhaps less obvious that we couldn't have done more to affect the exchange rate. It's not that we didn't care - as has sometimes been suggested. In fact we've repeatedly made it clear that we'd welcome a stronger euro because that could help to restore a better balance to the UK economy. The problem has been that we didn't know how to bring it about, certainly without destabilising the overall economy. Many people think it's simply a question of reducing our interest rate by more than the ECB reduced theirs. But it really isn't as simple as that makes it sound. We did indeed do precisely that last year but sterling continued to strengthen - though it has in fact fallen back somewhat against the euro since as the euro has staged a moderate recovery. What we were able to do - given that inflation was somewhat below target - was to try to compensate for the external weakness by stimulating domestic demand here in the UK.
Malaysia is also a leader in the development of sukuks and its pioneering efforts have seen the introduction of innovative structures such as the exchangeable sukuk musharakah, exchangeable sukuk as well as sukuk based on istisna' and ijarah. This is reinforced by the diversified tenures of the issues. Malaysia's strong financial links to the traditional and nontraditional markets such as in the Middle East also allows issuers to diversify their investor base. Malaysia therefore continues to remain an important destination for international financial flows that are traded on the New Silk Road. In concluding my remarks, I wish to congratulate all those involved in crystallizing the Electronic Trading Platform that is being launched today. This is a further step to create a more vibrant bond market. The growing role of the bond market in mobilizing and allocating funds not only in the domestic financial system but also across borders, to and from other parts of the world, has demonstrated the maturity of the Malaysian bond market. This has not only strengthened international financial inter-linkages but has increased the potential for greater economic integration and shared prosperity. 2  BIS Review 53/2008