Macro prudential policies in EMEs are even more important than before due to the divergent monetary policies in AEs. 6  BIS central bankers’ speeches  The Central Bank of Turkey’s roadmap of policy actions before and after global monetary policy normalization The Turkish economy has shown a relatively robust performance in the face of major external and internal shocks. GDP growth is estimated at around 4 percent in 2015 with an expected gradual strengthening of economic activity in 2016 and in 2017 (Figure 12). The rise in GDP growth rate observed in 2015 is mostly attributed to strong private consumption. Private investment recorded a moderate recovery. The challenging external conditions especially geopolitical events in the region have adversely affected exports. However, the economic recovery in most EU member states enabled Turkey to largely compensate its loss in other exports markets as Turkey increased exports to the EU countries by more than 10 percent in euro terms in 2015. This outcome also highlights Turkish exporters’ resiliency in adopting to adverse economic conditions. Of course, probably the most significant development of the last year or so has been the sharp decline in oil prices. Turkey, being an energy importing country, benefited from lower oil prices in many dimensions. The current account deficit fell from $ billion in June 2014 to below $ billion in November 2015 in 12 month cumulative terms. This sharp improvement in the current account balances has also been greatly helped by prudent macro-economic polices including monetary, macro-prudential and fiscal policies.

Efforts are now underway to address many of the shortcomings in the financial infrastructure that have contributed to the crisis. With the worst of the crisis now seemingly over, attention has turned to strengthening the global financial system. There is now an even greater need to restore confidence in the integrity of the global financial system given the loss of trust between society and the financial sector particularly in advanced economies . At the core of this reform agenda is the development of a new financial regulatory framework that would be more effective, one that is premised on greater emphasis on ethics, fairness, and accountability and that promotes global economic, social and environmental sustainability. It also needs to be anchored on a sensible balance of supporting growth while maintaining financial stability , and one founded on greater international coordination of regulatory approaches and supervisory oversight with a crisis management framework that will reduce systemic risk, and the severity of any such future financial crises. Given the scale and magnitude of this recent crisis, the global regulatory reform being shaped is wide-ranging. Bold measures are being developed in various international forums with fundamental changes to the current approaches to financial regulatory and supervisory oversight. Some of these reform proposals have attracted intense international debate generating divergent views on these issues. A broad consensus however is emerging on the need to raise both the quantity and quality of regulatory capital, strengthen liquidity rules and improve market transparency.