As Mario Draghi says: “Let’s keep in mind that fragmentation starts with the decision by banks not to operate in regions where the risk-return of lending is judged to be insufficient to remunerate their invested capital”. Supervisors’ advice for banks in the post-crisis period remain the same: banks should adapt the business model to be more effective and profitable, improve risk management and manage the cleaning of the balance sheet from legacy assets. Despite the progress made, these tasks are yet to be completed and now is the most appropriate time to finalize them. The regulatory framework is clearer and more complete (the implementation of Basel III is starting), supervision is clearer in terms of methodologies and policies, and the application of FinTech allows banks for new ways to do business efficiently. Lastly, and more importantly, the overall macroeconomic framework is stabilised and the positive economic growth is stable. The framework presented above is a good guideline to address the remaining post-crisis challenges. Is the adoption of international standards on financial stability safeguarding necessary? The answer is yes, because the globalization and interconnection of the banking sector needs the standardization of prudential regulation. However, while adopting international standards, it is important to keep in mind two issues: First, these standards have to adapt to the development level of the country and calibrated according to domestic conditions. Second, international standards pose a minimum of requirements, leaving it at the discretion of individual countries to undertake more stringent requirements.

We are closely monitoring the progressive increase in the demand for loans for investment, operating capital and stock enhancement, and the gradual decrease in demand for debt rollover. High-frequency data also signal a recovery in the labor market on the back of the reopening. Although employment in the services sector has been recovering more slowly amid pandemic-related restrictions and is still slightly below its prepandemic level, employment growth in the industry and construction sectors as well as the non-farm employment has exceeded pre-pandemic levels. We consider that the services employment will also exceed its pre-pandemic levels in the upcoming period. In the last couple of years, our economy suffered a variety of shocks, with the pandemic in the lead. The Central Bank has adopted a policy that curbs the  6  lasting effects of these shocks, safeguards domestic and external balances and prioritizes price stability as the ultimate goal. We are closely monitoring the current account and external financing data. Currently, the upward trend in exports, the recovery in tourism and the significant decline in gold imports support the ongoing improvement in the external balance. According to the provisional foreign trade data for August, our exports particularly to Europe are quite strong. The strong momentum in vaccination since June played an important role in the improvement of the risk perception towards Turkey and the easing of restrictions. In this context, we are getting positive signals on the recovery in tourism activity.