well. recent estimates of international institutions point out a prolonged period of recession in developed economies and a sharp slow down in growth rates of developing economies. addressing these challenges, g - 20 summit held in brazil on 8 - 9 november 2008, issued a communique that included the following statement : “ we affirmed our determination to take all necessary steps to foster non - inflationary growth in a stable and sustainable manner according to the needs and available instruments in our respective countries, including through monetary and fiscal policy. ” distinguished guests, as concerns over inflationary pressures have subsided all over the world, maintaining the smooth functioning of financial system and efficiency of credit markets has become the main priority of policy makers. it will be proper to evaluate the recent developments in turkish economy in this perspective. in turkey, the banking system has been relatively prepared for the current crisis in terms of foreign exchange liquidity. its foreign exchange short position is also well contained. foreign exchange position of the public sector is almost negligible. the household sector is net creditor in terms of foreign exchange, while real sector is net debtor. since securitized products are rarely used in the turkish banking sector, the ongoing financial turmoil has not put a marked pressure on local banks through that channel. current account deficit, historically a source of vulnerability for the turkish economy, is likely to experience a sharp drop in the upcoming period due to correction in commodity prices, slow down in economic activity and depreciation in new turkish lira. still, extraordinary fluctuations in global liquidity conditions have adversely affected turkey like other countries, which are sensitive to international financial developments. at this point, i would like to emphasize that we will continue to take the necessary measures to contain the adverse effects of the global financial turmoil on the domestic economy, provided that they do not conflict with the price stability objective. the general framework of the central bank ’ s liquidity management is fairly flexible and wellstructured to fulfill its lender - of - last resort role and meet both new turkish lira and foreign exchange liquidity requirement of the banking system effectively. we will not allow any setback in new turkish lira money markets and will ensure smooth operation of payment system. in this context, judging that inflation will display a more rapid fall than envisaged before, the monetary policy committee has decided to lower the borrowing rates by 50 basis points on november 19, 2008. in addition, the margin between the lending and borrowing rates was reduced by a further 50 basis points

, severe droughts have cost argentina 3 % of its gdp, 1 floods in pakistan have caused damage and losses equivalent to 8 % of gdp, 2 not to mention the recent rise in global food prices. moreover, a variety of climate shocks are likely to materialise in the future, with potentially massive consequences for growth and inflation. this quadrant [ slide 5 ] presents four categories of potential climate - related shocks attributable to physical risks ( i. e. climate disasters ) or transition risks ( i. e. disorderly transformation of our economies ) : negative supply shocks, such as a disorderly introduction of a carbon tax ( transition risk ) or frequent and severe natural disasters ( physical risks ). negative demand shocks, such as a crisis of confidence linked to regulatory uncertainty ( transition risk ). positive demand shocks, such as increased public spending and investment. positive supply shocks, such as a productivity boost from green innovations. these shocks may occur together or consecutively. their individual probabilities are difficult to assess at this stage, although the negative supply shock ( top left ) would appear slightly more likely than the others. this uncertainty is due in particular to the political decisions to be taken by each state. for example, changes in carbon pricing, volumes of'green'investment and public subsidies will all impact the climate change trajectory and its economic consequences. given this broad range of possible shocks, incorporating climate risks into the conduct of monetary policy means incorporating them into our macroeconomic assessment and forecasting models and using climate scenario analyses. and this is what we are doing as part of the ecb's climate agenda3 finalised in july 2022, by working specifically to take better account of the risks to price stability in the macroeconomic forecasting models we use. we are also working on short - and long - term scenarios under the aegis of the network for greening the financial system ( ngfs ), a network of nearly 140 central banks and supervisors, co - founded in 2017 by the banque de france ( which provides the secretariat of the network ) and other partner institutions. the ngfs carries out research, and defines and promotes best practices for mainstreaming climate risk into the activities of central banks and supervisors. seven long - term scenarios, with a 50 - year time horizon, have been developed by the ngfs [ slide 6 ] in line with the approach taken by the ipcc. some of these scenarios assume that ambitious climate policies will be introduced quickly and will gradually become more