In the same spirit, the Government should be prepared for the possibility that, should the course of the pandemic worsen, it may be necessary to introduce additional measures or to extend or recalibrate those already in place. In addition, there needs to be a transition from the current income support policies for households and liquidity and funding support policies for businesses towards measures geared to fostering medium and long-term growth. In particular, this requires that budgetary policy favour, rather than hinder, the necessary reallocation of resources. This is how the new incentives for furloughed workers to return to work, envisaged in the latest extension of these measures, should be understood. Moreover, although the structural changes that may be triggered by this crisis have become a recurrent subject of debate, the specific nature of these changes is as yet uncertain. On the one hand, it is noticeable that as a consequence of the pandemic, certain transformations that were already under way, such as teleworking or digitalisation, are accelerating. Yet on the other hand, and by contrast to the experience of the previous crisis, which saw structural correction of certain industries in Spain, such as construction and financial services, that were oversized, it is not at all clear that the sectors currently most affected by the social distancing rules resulting from the pandemic will see a permanent fall in their demand once we have overcome the health crisis.
My remarks today will focus on the implications for the strategic direction of the Islamic financial industry taking into consideration the lessons learned from such financial turbulence including the current crisis. As Islamic finance becomes an integral part of the international financial system, it will be increasingly tested by such developments. History has shown that the world will continue to be plagued by such crises. The key for the Islamic financial industry is therefore to ensure that it would not be a source of such financial instability and is able to achieve a level of resilience that would ensure its sustainability. Lessons learned from systemic banking crisis The world has experienced more than 124 distinct banking crises in the recent 27 years. 1 While the triggering factors that precipitated financial crisis have been different, for most, it resulted in a general loss of confidence and a downward spiral in asset prices. Such a crisis was experienced in the Asian region just over ten years ago. Following the lessons that were learnt from this experience, Asia has emerged in a better position to manage the spill over effects of the current financial turmoil. The key elements in the efforts have been the strengthening of the foundations that accord the resilience to withstand shocks to the system and that will ensure sustainability through episodes of such turmoil. There are several similarities in the current financial crisis and the Asian financial crisis.