erdem basci : financial stability and turkey ’ s achievements to date welcome speech by mr erdem basci, governor of the central bank of the republic of turkey, for the 17th international conference of banking supervisors, istanbul, 13 september 2012. * * * distinguished deputy prime minister, esteemed guests and distinguished members of the media, welcome to istanbul and to the 17th international conference of banking supervisors jointly hosted by the central bank of the republic of turkey and the banking regulation and supervision agency of turkey. in my speech, i will try to summarize the importance we attach to financial stability and the achievements we have made up to date. dear guests, there are three essential factors that determine the growth potential of a country ; these are price stability, financial stability and productivity. any weakness in any of these three factors may cause considerable damage to growth. the history of economics is teeming with examples of this. the social costs of loss of price stability are now very well known by economists. academic studies indicate that an inflation rate that is on average higher by 10 percentage points leads to a reduction in the gdp growth rate an average of a quarter point. 1 meanwhile, the loss of financial stability has deep and long - term impacts on growth and employment. 2 the cost of preventing a financial crisis is much lower than the cost of the crisis itself. turkey ’ s recent history is a very good example of this statement. the economic crisis, which turkey went through in 2001, increased the country ’ s sovereign debt by 30 percentage points, and severely affected growth and employment prospects. as of 2002, turkey focused on establishing price stability, financial stability and introducing structural reforms aimed at increasing productivity. as a result, while the country ’ s economic prosperity grew at a rapid pace, the financial sector gained a structure resilient to external shocks. the steps taken towards fostering financial stability helped turkey recover rapidly after the 2008 – 2009 global financial crisis and it weathered the european sovereign debt crisis of 2011 – 2012 with minimum damage. distinguished guests, the primary objective of the central bank of the republic of turkey is to achieve and maintain price stability. besides price stability, contributing to financial stability within the limits of its purview has been also listed among the primary duties of the bank. comprehending the importance of systemic risk along with macroprudential measures to mitigate this risk to ensure financial stability has necessitated reconsideration of the regulatory framework at global level. the enforcement of the dodd - frank act

durmus yılmaz : role and responsibilities of emerging economies in the global monetary system speech by mr durmus yilmaz, governor of the central bank of the republic of turkey, at the conference on " where is global finance heading? ", istanbul, 2 october 2009. * * * dear guests, i would like to welcome you all to istanbul. it is a great pleasure for us to host this conference and such a distinguished group of central bankers, academics and experts. i hope this meeting, together with the upcoming events, will be helpful in shedding light on the future of the global financial system. it has been almost two years since the surfacing of global financial crisis of epic proportions and we are still dealing with its repercussions. one can easily identify a variety of reasons for its occurrence : global macroeconomic imbalances certainly played a key role. deficiencies in financial regulations and lack of coordination among monetary authorities and regulatory institutions played even a bigger role. policy makers were quite complacent during the build up in asset bubbles. accommodative monetary policies enabled access to cheap money. high leveraged transactions magnified the amount of liquidity created through financial system. search for high yields led to excessive risk taking and use of complex instruments. compensation scheme in the financial sector encouraged short - term bias. above all, believed that with the use of complex financial instruments, one can wipe out the risk from balance sheets. however, risks only changed form and address in the financial system, just like the energy continuously transforms in the physical universe. almost all economists agree that we are heading to a slow, gradual and painful recovery. and as a central banker who has spent almost 30 years in this profession, i can tell you that it is a miracle itself to have so many economists agree on one issue with so much vigor and conviction. the future of the global financial system will be shaped by the lessons we derive from our current experience. the ongoing crisis revealed that preventive measures put in place at the local level by national authorities may not be effective to address global problems. it also underlined the importance of international cooperation and coordination in designing and implementing economic policies. it is clearly understood that the only way to prevent future crises at the global scale is multilateral cooperation. however to establish and sustain multilateral cooperation is not an easy task. as ( john maynard ) keynes once said, “ the biggest problem is not to let people accept new ideas, but