However, banks have not yet been able to fulfill their intermediary functions as effectively as expected. This results mainly from the fact that the banks are still the principal fund-raisers to finance public deficits. Reducing the ratio of public deficits and debt stock to national income will increase disposable resources and this will remove the obstacles to credits extended to the real sector by the banking sector. The implementation of modern risk management in credit facilities will equip banks and companies with a more robust financial structure. Needless to say, all these developments mean that the banking sector supports the capital accumulation process in the private sector by providing the real sector with resources. This, in turn, shows that the current program is providing critical support for the real sector through banking reform. The second issue is tax reform. Although important steps have been taken regarding tax reform in Turkey in the last few years, our tax system still has some flaws in matters of equality, effectiveness and management. In order to remove the unfavorable effects of the tax system on the economy and to assure permanent increases in income, the tax system should be simplified and the effectiveness of tax administration should be increased. The tax system should be equipped with a simple, comprehensible and fair structure that will avoid discrimination between different sectors. Studies to broaden the tax base, formalize the informal economy and restructure income management, which are among the reforms envisioned in the current program, have not been completed yet.

These are created by the fact that the assets and liabilities sides denote different currency units or consist of securities with different interest rates. As a matter of fact, firms with reduced financial risks on their balance sheets can allocate more resources to production. Moreover, derivatives markets introduce new investment instruments and encourage growth in the financial system. In this way, they increase the number of instruments investors can use to diversify their portfolios, and widen the financial markets. As a result, derivatives markets contribute to the increase in national income and employment by ensuring more effective allocation of resources and they provide added value as a separate sector. At the same time, these markets enable the real and financial sector investors to manage diverse risks parallel to those in world markets as well as allowing integration with those markets. Analyzed in terms of monetary policy, derivatives markets, whose development has always been backed by the Central Bank, support the continuity of financial stability by reducing volatility in the markets and help central banks to maintain financial stability. In addition, they enhance the information set used in monetary policy by providing information about the future, and increase the effectiveness of the transmission mechanism used to steer the economy. As a consequence, an improved flow of information about the future course of monetary policy makes the economy more predictable for economic agents. In this framework, the Turkish Derivatives Exchange will make important and diverse contributions to the economy, especially in terms of monetary policy.