Financial Sector Policies for 2019 and Beyond  In fulfilling the responsibilities entrusted by the MLA, the Central Bank continues to foster a vibrant, resilient and strong financial sector, which facilitates economic growth through efficient allocation of resources. In pursuit of this, the Central Bank acts as the apex regulatory and supervisory institution of the financial system. It seeks to promote dynamic and stable financial institutions, while facilitating an efficient payment and settlement system. In 2018, the financial sector performed well amidst challenging market conditions in the domestic as well as the global environment. Asset growth of the banking sector was at favourable levels with the improvements in liquidity and capital levels, while financial outreach also strengthened during 2018, despite the slowdown observed in the non-bank financial sector. Strengthening the regulatory and supervisory framework of the banking sector remains at the centre of our financial sector policy. During 2018, the regulatory and supervisory framework pertaining to licensed banks was further strengthened with the introduction of an array of policy measures in line with international standards and best practices. During 2018, the Central Bank issued Directions on Basel III liquidity standards and Directions on leverage ratio. The Directions on leverage standards are also being issued. In addition, the Central Bank issued Directions on foreign currency borrowings by licensed banks with a view to promoting transparency and further strengthening risk management aspects of foreign borrowings by banks. 23  Meanwhile, to strengthen risk management, the Central Bank issued Directions on financial derivative transactions of licensed banks.

In this regard, significant progress has been made in the restructuring of payment systems operating under the auspices of the Central Bank. The oversight of payment systems operating outside the Central Bank also rests with our Bank. Considering the need for a regulation on general standards including all payment services and systems in Turkey, the Bank prepared a “Draft Law on Payment Systems”, which also complies with the European Union acquits, and the draft law has been submitted to the relevant institutions and agencies to hear their views. Once the draft law has been addressed at the Grand National Assembly of Turkey and as soon as the law has been revised in line with the views of the relevant institutions, an important step will be taken to reshape the legal framework on payment systems in harmony with the international standards. Esteemed Guests, The Central Bank’s membership of the Committee on Payment and Settlement Systems (CPSS) of the Bank for International Settlements (BIS) was finalized in 2009. In this platform setting key global principles and standards related to payment and settlement systems Turkey is represented by the Central Bank, which is actively involved in the studies conducted. In parallel with the said efforts, a joint study was carried out with the Committee on Payment Settlement Systems (CPSS) and International Organization of Securities  2  BIS central bankers’ speeches  Commissions(IOSCO)and “Principles for Financial Markets Infrastructures(FMI)”, which covers payment systems of systemic significance, settlement systems for securities, central custodians, central counterparties and transaction registry centers.