The crisis management measures taken by the central banks of the euro area in recent years have been successful, but they have come at a price. Both the balance sheets of the central banks and the associated risks have increased many times over in consequence. However, the ratio of Eesti Pank’s increased equity to the assets used for monetary policy remains one of the lowest of any of the central banks of the euro area. The comparison with the other central banks of the euro area is important, as the balance of risks to capital of the central banks of the euro area as a whole is considered when joint monetary policy decisions are made. This makes it very important that the Supervisory Board of Eesti Pank decided to transfer three quarters of the 17 million euros that the bank made in profit last year to strengthening the capital of Eesti Pank. One quarter of last year’s profit, or 4.3 million euros went to the state budget, and since 1992 Eesti Pank has allocated a total of 133 million euros to the state budget. It may be asked what exactly the central bank’s reserves are for, given that the Riigikogu bears the responsibility of last resort for capitalising Eesti Pank? History has shown that central banks fall into difficulties at times when there is a general economic or financial crisis.
Islamic banking has strongly emerged as an efficient and effective financial intermediation channel, forming an integral part of the overall Malaysian financial system. Today, we have developed a comprehensive Islamic financial system covering banking, Islamic insurance, the money market and capital market, that operates in parallel with the conventional system. Islamic banking now accounts for 10 percent of the market share of the total banking system. There has been a rapid expansion in the development of Islamic financial instruments. At the global front, Malaysia was the first country to issue a sovereign Islamic financial instrument launched in the international financial markets. The capacity of the Islamic banking institutions to arrange and offer products with attractive features and competitive pricing, which are comparable to the conventional products has been enhanced. While Islamic finance was first introduced to meet the needs of the Muslim community, today, the Islamic financial products and services have wide appeal to both Muslim and non-Muslim customers. The Malaysian Islamic banking institutions operate under a robust regulatory and supervisory framework at par with the conventional banking institutions to ensure the soundness and stability of the system. At the international level, the establishment of the Islamic Financial Services Board will further harmonise the international prudential and regulatory standards for the Islamic financial institutions on a global basis.