Some things could definitely have been arranged in another way both in the late 1980s and once the crisis was over us in the early nineties. BIS Review 80/1998  -3-  But the vital conclusion is, I believe, that the roots of the profound crisis stretched a long way into the past. An economic policy realignment was essential; a credible stability oriented policy had been lacking ever since the collapse of the Bretton Woods system in the early 1970s. It was high time to put this right. Making the new regime credible After the long period of high inflation, together with extensive economic problems and massive government deficits, the task of inspiring confidence in economic policy’s new direction proved difficult at first. Economic agents listened to the new approach with doubts and hesitation. As we know from other countries, however, creating confidence in a new regime with low inflation is a rather long process that takes time. Moreover, if the work of keeping inflation low and government finances in order is to be combined with low interest rates and stable growth, it is a task that never ends. In recent years the low-inflation regime has gained increased credibility. Besides a disciplined monetary policy for price stability, a major contribution to this has come from the consolidation of government finances. In just a few years a budget deficit at 12 per cent of GDP has been turned into today’s surplus.
We will see later that these areas find a strong echo in Islamic finance, which has also to deal with issues linked to lack of transparency, of a level playing field and harmonised regulation. Thus, the overhaul of regulation in conventional finance should be an opportunity for Islamic finance to tackle these issues, and to better integrate into financial globalisation. In France, in particular, Islamic finance has a role to play, which could be beneficial both to Islamic investors and to the French economy. Indeed, the French economy offers major and diversified investment opportunities for Islamic investors in the financing of a wide network of often innovative firms and projects, or in real estate. These sovereign funds, corporates or wealthy individuals should have the opportunity to invest, either directly in individual assets or projects, or indirectly through funds or  BIS Review 118/2009  1  collective vehicles. It is up to banks to offer to these investors the type of Shariah compliant products and investment or financing tools they might wish to have. Let me make a brief point on sovereign wealth funds (SWFs) and their link with Islamic finance. SWFs have attracted much attention recently but the oldest ones were set up back in the 1970s. Their expansion accelerated about a decade ago, when many emerging countries started to accumulate sizeable foreign exchange reserves, due to high oil and gas prices and to the conjunction of macroeconomic factors and foreign exchange policies.