Regarding the monetary policy implementation, the main pillars of the Central Bank’s approach are its transparency, its accountability and its predictability. We, as a Central Bank, always favor a forward-looking approach. Given the increasing importance of its economic presence and close relations with the countries worldwide, it is crucial that Turkey improve its domestic markets to contribute to the efficient allocation of world resources. With this in mind, we will continue to implement structural reforms and our disinflation program to realize robust economic fundamentals. Final thoughts In closing, I would like to comment on what seems to be important in building a more robust and healthy global financial system and the world economy. The ongoing process of globalization, along with the revolution in information technology, is likely to continue in the future. One consequence of this trend is the intensifying competition at the global level. In this context, to benefit from this trend countries all over the world should react positively. The soundness of individual financial systems clearly affects the resilience of the international financial system as a whole. We should devote our efforts towards creating a healthier global environment by minimizing the volatility of international capital flows and the risk of contagion. More effective supervision and surveillance of banking systems is of the greatest importance in today’s international banking environment and the emphasis of the recent supervisory changes has been moving from the “rules-based” method of supervision towards a “risk-focused” supervision.

During the last two decades, the banking sector, which plays a prominent role in the Turkish financial system, has made significant progress in implementing structural changes towards a more financially liberalized Turkish economy. Combined with the effects of restructuring Turkish economy and the efforts for the integration to the modern world of finance, the Turkish banks achieved important changes in their institutional structures on the one hand, and in the quality of services and products on the other. In this very outward-oriented and closely supervised banking environment, the need for highly qualified managers and specialized personnel is obvious. With this in mind, Turkish Banks became more effective in their utilization of human resources. The number of university graduates and postgraduates in the banking sector has steadily increased over the last two decades, as has the level of professional training. The increase in the number of banks and qualified personnel, in turn, enhanced competition and contributed to broad utilization of new financial instruments and techniques. Furthermore, the banks were motivated to attain a dynamic structure through automation. During the last decade, Turkish 3  BIS Review 79/2000  banks became more automated and efficient, along with their foreign counterparts. For example, the number of ATMs in Turkey has increased from zero to over 8,000 in the last decade. Intense competition and a desire to integrate with global financial markets has driven banks to improve the quality and the variety of services through information technology and international payment systems.