It is also relatively accepted that actions taken under this scheme are designed to increase the resilience of the financial system and its participants when dealing with shocks, or the flip side of the coin, to reduce their vulnerabilities. These definitions have also allowed to specify that macroprudential policy is different from monetary policy, since their objectives (price stability versus financial stability), as well as their emphasis and tools, are different. For instance, while monetary policy operates on the  BIS central bankers’ speeches  1  basis of projections of the most likely scenarios for the economy over a given period, macroprudential policy operates based on tail risk scenarios that are therefore less frequent. As for the tools they use, monetary policy is mainly conducted with just the benchmark interest rate, whereas macroprudential policy has been associated with many and varied tools, including limits to leverage or credit users’ financial expenditure, limits to banks’ foreign currency mismatches and the use of some sources of funding, application of reserve requirements and other restrictions to credit growth. About the latter, it is worth noting that, while it is possible to motivate the need for macroprudential policies based on various externalities and market failures, so far its implementation has progressed in an ad-hoc and experimental manner, and the tools used are not necessarily aimed at resolving such externalities at their origin.
Muhammad bin Ibrahim: Enhancing the professionalism of Malaysia’s Islamic financial services industry Speech by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launch of the Chartered Institute of Islamic Finance Professionals (CIIF), Kuala Lumpur, 6 November 2015. *  *  *  Today’s official launch of the Chartered Institute of Islamic Finance Professionals (CIIF) marks a momentous occasion that reflects our collective effort to enhance the professionalism of the Islamic financial services industry. We are embarking on a long journey to create a new landscape of talent development, one which is permeated with a strong culture of professionalism, integrity and ethics. Greater professionalism among Islamic finance practitioners will instil greater confidence and capability to the Islamic finance industry to better serve public interest. The recent global financial crisis has brought to the fore the importance of trust, confidence and integrity in the financial services sector. The banking industry is subjected to continuous scrutiny on their values, professionalism and work ethics. This has prompted a host of initiatives both domestically and globally, aimed to strengthen the industry, given the significant role financial institutions have to the broader interest of society and the overall economy. Maintaining public confidence is critical. It is therefore in the industry’s interest to always place public trust above everything else, and only if we are able to do this, we shall enjoy the confidence that ensures the long-term growth of the industry.