addition to the flexible monetary policy strategy implemented by the central bank as of the end of 2010, the prudent measures adopted by the brsa accompanied by the safeguarded fiscal discipline strengthened the central bank ’ s hand. we firmly believe that we will attain very positive results with respect to price stability and financial stability by the end of 2012. along with national macroprudential measures introduced by countries, some international criteria have also been developed for the sake of safeguarding financial stability. for example, the basel iii accords bring about new arrangements reinforcing the capital structures of financial institutions. these arrangements will ensure a more resilient financial sector against unforeseen risks and will contribute to financial stability. the recent efforts clearly point to a consensus among countries on the critical importance of safeguarding financial stability. despite the consensus among policy - makers on the importance of financial stability, the economic literature lacks adequate theoretical and empirical studies on the details of the transmission mechanism from financial stability to macroeconomic stability. at this point, academia is expected to do their share in this respect. the two - day conference will stage parallel sessions, panel discussions and presentations on these issues. banking sector dynamics, macroprudential measures and their impact on macroeconomic stability, systemic risk issue and sovereign debt dynamics are among the topics that will be addressed at the conference. two of our distinguished guests, mr. ricardo caballero and mr. franklin allen, will be delivering speeches. mr. caballero will be presenting a speech on the first day of the conference and mr. allen ’ s presentation is scheduled for the second day. on the second day of the conference, the panel discussion titled “ how did the crisis challenge the central banking as we knew it? what should ( not ) change? ” will be held, at which senior central bankers will be sharing their country experiences. i think this panel discussion will be very interesting and beneficial for all the participants. the studies that will be presented throughout the conference will contribute to better understanding of the factors threatening financial and macroeconomic stability and developing policies to achieve these two objectives simultaneously. i believe that the conference will also serve as a forum for the participants for exchanging views. in this respect, i would like to thank the organization committee for their efforts in bringing these very interesting and enlightening studies under this conference. i wish the conference a complete success and i would like to thank all our guests for their participation. bis central bankers ’ speeches

an expansionary rather than contractionary impact on economic activity. in sum, while turkish economy contracted sharply during the recent crisis, its well capitalized and sound financial system is likely to support the economic activity along the recovery. in fact, recent gdp releases suggest that economic activity in turkey displayed a solid rebound in the second quarter. therefore, we feel that the worst episode of the crisis is now behind us, which should in turn support turkey ’ s economic prospects. however, it remains to be seen whether recent improvements in leading indicators will translate into a long lasting and durable recovery, since part of the rebound reflects the impact of the fiscal stimulus packages. the situation is similar across the globe : recovery has started in the global economy, yet the extraordinary policy measures taken since the last quarter of 2008 makes it harder to interpret the underlying trends. given the elevated levels of unemployment and ongoing de - leveraging process, the recovery is likely to be gradual. distinguished guests, let me close my speech by turning to the main theme of this session. overall, i am encouraged to recognize initial signs of recovery but also i am anxious that the green shoots that have sprouted may still expose to a spring frost. “ green shoots ” may not be vigorous enough and important downside risks still remain. however, unlike a couple of quarters ago, we should also acknowledge that we can now at least talk about upside risks – that is, “ blossoming shoots ”. thank you.