David Clementi: Crisis prevention and resolution two aspects of financial stability  Speech by Mr David Clementi, Deputy Governor of the Bank of England, at the Inaugural Lecture at the South Bank University Centre for Monetary and Financial Economics, London, on 6 September 2000. *  *  *  Introduction Ladies and Gentlemen, When I was invited to give the inaugural lecture at the Centre for Monetary and Financial Stability, I was pleased to accept. It is obviously an honour to be asked to inaugurate any academic institute but supporting the foundation of a centre dedicated to the pursuit of monetary and financial stability is, for a central banker, a particular pleasure! After all, monetary and financial stability and the interaction of the financial system with monetary policy are at the heart of the Bank’s mission. The first of the Bank’s core purposes is maintaining the integrity and value of the currency or, in other words, monetary stability; the second is maintaining the stability of the financial system. I intend to focus my remarks on this second core purpose. Financial stability has always been an integral concern for central banks. We have been reminded of its importance by the events of recent years. The Asian Crisis in particular set in train a programme of international work and discussions, looking at ways to prevent a recurrence and to handle one if it did.
Such a prudential regulatory design would further complement concurrent efforts that are underway to develop Islamic financial markets and Islamic financial instruments. This architecture will contribute towards the development of a robust and resilient Islamic financial system that can effectively preserve financial stability and contribute to balanced growth and development. Ladies and Gentlemen: In recognition of this need, a proposal was made two years ago to establish an organization to spearhead the development of a uniform set of prudential, supervisory and disclosure standards for the Islamic financial services industry internationally. This proposal was crystallized and endorsed during a consultative meeting of a group of Central Bank Governors, and officials from the Islamic Development Bank (1DB), the Accounting and. Auditing Organization for Islamic Financial Institutions (AAOIFI) and the International Monetary Fund (IMF) in Prague in September 2000 during the occasion  BIS Review 64/2002  1  of the lMF-World Bank Annual Meetings. The endorsement set in motion the formation of a preparatory committee, with officials from Bahrain, Iran, Malaysia and Sudan, and representatives from the IMF, IDB and AAOIFI, to develop the terms of reference and operational structure for the Islamic Financial Services Board. In a meeting of Governors in April this year, Malaysia was mandated to lead a Steering Committee for the establishment and inauguration of the Islamic Financial Services Board in Kuala Lumpur. Today's historic event is the culmination of this extensive two-year consultative process.