When the weaknesses  BIS Review 99/2006  1  were not adequately addressed, the process of reconstituting the Board and management of Bank Islam was initiated in 2003. In such an exercise, key shareholders are expected to be proactive in making prudent and responsible action to remove any member or employee that is found to be unsuitable or not having the required calibre so as to avoid a prolonged process in the reconstruction of the Board and management of the bank. It needs to be recognized that the responsibility for the safety and soundness at the institutional level rests primarily with the Board and the management of each banking institution and the key stakeholders such as the significant shareholders. Institutional investors should also have an active role and make swift and bold decisions in ensuring that only capable individuals are appointed and remain on the Board and senior management of banking institutions. Currently, virtually all the directors and key executives of Bank Islam are new, with diverse banking experience. In accelerating the provisions and in instituting the measures to address the bank's system, processes and business culture, it has now paved the way for drawing in new shareholders. It can now offer a valued proposition. And indeed, the participation of a new strategic investor will in fact further strengthen the bank. This has allowed the existing and new shareholders to focus taking the bank to the next level and to capitalize on the new opportunities the environment offers.
As a result, in the long term, two different uses of the CBDC could exist side by side: one for payments between financial sector players (a socalled “wholesale” currency) that uses blockchain technology and all its possibilities, notably smart contracts; and another for the general public (a so-called “retail” currency) that is simpler and better suited to retail transactions. In this respect, financial institutions are much more digitally mature than private individuals as they already access central bank currency digitally via the bank accounts they hold with the central bank. In addition, following on from the questions raised by the Governor of the Bank of England, Mark Carney, on the idea of creating an international digital currency in response to the dominance of the US dollar, I think there would be some advantage in moving rapidly to issue at least a wholesale CBDC, as we would be the first such issuer in the world and would thus reap the benefits of having a benchmark CBDC. 2/ The issuance of a CBDC can generate significantpositive externalities by increasing the productivity of the financial sector and by extension the economy, and by shoring up confidence in the currency and in the financial system. But, in parallel, it is vital that we examine the potentially negative externalities that a CBDC could generate for liquidity, profitability and bank intermediation. In particular, we need to look very closely at the risks linked to large-scale and/or sudden conversions of bank deposits into central bank money.