durmus yılmaz : the role of competition policy and practices in attaining macroeconomic objectives speech by mr durmus yılmaz, governor of the central bank of the republic of turkey, on the occasion of the 11th anniversary of the turkish competition authority, ankara, 26 march 2008. * * * ladies and gentlemen, first of all, i would like to greet you all. we have convened here on the occasion of celebrating the 11th anniversary of a distinguished institution of turkey. the turkish competition authority has served its critical function in the development process of turkey with the studies it has conducted. let me take this opportunity at the very beginning of my speech to say that i believe the contributions of the competition authority to turkey ’ s development will continue in an increased capacity in the upcoming periods. the main objective of public policies is to increase prosperity. under the current circumstances, where economies are becoming increasingly interrelated, raising the level of prosperity of our country is contingent on increasing the share it gets from the global value added. in the post - 2001 period, the turkish economy grew by approximately 7 percent on a year - onyear basis and considerably increased its share in the world export market. during this period, the private sector was the engine for growth, with the greatest contribution from the industrial sector. in the 23 - quarter periods of uninterrupted growth process, private sector investments increased by 150 percent in real terms. exports, which had been usd 31 billion at end - 2001, reached usd 107 billion by end - 2007. moreover, turkey has attracted more than usd 40 billion - worth of foreign direct investments in the last two years. the complementary effects of macroeconomic and microeconomic policies are observed in economic progress. monetary policy focusing on the achievement and maintenance of price stability as well as resolute budget implementations has played a critical role in the establishment of macroeconomic stability. at the same time, reforms towards a more robust banking sector structure, adjustments for an improved investment environment, privatizations, liberalizations in basic infrastructure sectors and improvements in the regulatory and supervisory functions of the public sector have all led to a significant improvement in the production, investment, competition and business environment of turkey. thus, in the last two years, turkey moved up a total of 18 steps and ranked 53rd among 131 countries in the global competitiveness index prepared by the world economic forum. studies made indicate the necessity of reforms in the microeconomic level to maintain high and sustainable growth rates in an environment

instruments shall be denominated in major reserve currencies. this is to ensure access to a large pool of global investors and broaden the range of its holders, thereby enhancing the prospects for active secondary market. there is not an available mechanism through which the central bank of turkey can provide liquidity to the interest - free banking sector, or the so - called participation banks. however, the central bank of turkey has become a founding member of the iilm and contributed 10 million usd to its equity. as additional efforts by the institutions in turkey to facilitate participation banks ’ liquidity management, the undersecretariat of treasury has started the issuance of revenue indexed bonds, which are purchased by the participation banks. as it is known, another kind of interest - free security, which could be useful for participation banks especially in their liquidity management, is a specially designed financial certificate, called “ sukuk ”. there is a regulation of the capital markets board of turkey dated 1 april 2010 that permits the issuance of rent certificate, which are very similar to asset - backed securities. we believe that such interest - free securities, which could also be traded in secondary markets, is very beneficial for the participation banks in their liquidity management operations. distinguished participants, the vital issue of liquidity management has the potential to reshape the future trends in the monetary policy framework. the path to resolution involves not only revisiting economic policies, but also economic and institutional infrastructure that surrounds them. in this sense, the islamic finance has a good way to go in order to maintain well - structured liquidity management system. i hope that this conference will lead to new ideas that help authorities in their efforts to design a solid islamic liquidity management structure. thank you for your attention. bis central bankers ’ speeches