In the third quarter of 2011, mounting concerns regarding sovereign debt sustainability across the euro area, coupled with the slower-than-expected recovery in U.S. real estate and labor markets intensified the downside risks regarding global economic activity. Accordingly, global economic activity forecasts were revised downwards and expectations for a further delay in the normalization of monetary policy in advanced economies grew stronger. Mounting uncertainties regarding the global economy and the deterioration in risk appetite led to capital outflows from emerging economies. This outlook not only fed into short-term inflationary pressures in emerging economies, but also highlighted concerns over growth and financial stability. 2  BIS central bankers’ speeches  1. Monetary policy developments and monetary conditions  The policies that we, as the Central Bank of the Republic of Turkey (CBRT), have been implementing since end-2010, aimed at gradually rebalancing the economy towards a robust growth composition without hampering the medium-term inflation outlook. Accordingly, we pursued policies to prevent excessive deviation of exchange rates from economic fundamentals in either direction, while also taking the necessary measures with the support of other institutions to ensure reasonable levels in loan growth rates (Chart 2 and 3). As a consequence of measures taken by the Central Bank and the Banking Regulation and Supervision Agency (BRSA), loan rates continued to rise in the third quarter (Charts 4 and 5). A marked slowdown is observed in credit growth owing to the lagged effects of  BIS central bankers’ speeches  3  measures taken and a deceleration in economic activity.

We also increase our autonomy and ensure that Europe is better protected in the world of tomorrow. As legislators, you have a crucial role to play in designing policies that can revitalise our economies. Digitalisation is a case in point. We need to fully reap the potential gains from digital technologies and, at the same time, make sure labour markets remain inclusive. If we don’t, we risk creating a new divide, and we can already see gaps opening up when we look at differences in wages, education levels and gender. [5] By implementing the right set of national and European policies, we will achieve more together than we can alone. At national level, we need to make the necessary changes to labour, product and financial market regulations, and invest in education to reduce digital exclusion. At European level, this should be  complemented by accelerating progress towards the Digital Single Market to help deliver economies of scale for digital firms, while addressing key concerns around cybersecurity and data protection. In a more digital economy, we also need to ensure the strength and autonomy of European payment systems. [6] The Eurosystem is actively pursuing initiatives to achieve this. We are also exploring the benefits, risks and operational challenges of introducing a digital euro. A digital euro could be a complement to, not a substitute for, cash; it could provide an alternative to private digital currencies and ensure that sovereign money remains at the core of European payment systems.