to strengthen relations with the imf. in her efforts to enhance regional cooperation, the cbrt laid the foundations of the dialogue among central banks that paved the way for the establishment of the central banks governors ’ club of central asia, the black sea region and the balkan countries. the relations and cooperation of the cbrt in the international scene go well beyond our bilateral dialogue with your esteemed bank and cover also the financial level ( swap agreements signed with certain countries ), as well as the educational level ( the establishment of an international central banking research facility and regional training centre, the istanbul school of central banking ). bis central bankers ’ speeches i would like to thank the bundesbank for opening a representative office in istanbul, for signing the mou agreement and for all the support and assistance you have provided us in diverse fields and at various platforms. closing my remarks, i would like to welcome my friend and colleague, dr. andreas dombret, a member of the executive board of the deutsche bundesbank, and thank him for his tremendous efforts in bringing this project to life. now let us celebrate our achievements. thank you for your attention. bis central bankers ’ speeches

banks have adopted. reinforcing the trend to transparency, central banks have arguably become more systematic in their responses to the economy over the past several decades. systematic policy setting is easier to explain and anticipate and, as a consequence, helps to limit economic uncertainty associated with the conduct of monetary policy. a resurgence in interest and research about systematic approaches to monetary policy was sparked by the observation of john taylor, currently undersecretary of the department of the treasury, that the fomc's conduct of monetary policy since the late 1980s has been well explained by a simple formula, often called the taylor rule, that relates the level of the federal funds rate to the observed levels of the inflation and the unemployment rates. john taylor's keen insight was offered originally as a rough benchmark for policy and not as a binding, prescriptive " rule. " and, in fact, the difference between the actual setting of the federal funds rate and the taylor rule can be large at times, particularly at critical points when the economic outlook has changed suddenly. the part of policy not explained by the rule then reflects the large volume of information about the economy and its prospects that is not captured by current inflation and unemployment rates but that the fomc does take into account. the fomc uses all this information in an attempt to anticipate developments ; the taylor rule is backward looking. these differences between actual policy and policies predicted by a backward - looking rule also reflect our imperfect and constantly evolving understanding of the structure of the economy. the success of the taylor rule in capturing the broad contour of policy actions in recent years has prompted an enormous amount of economic research in search of refinements to or extensions of the original taylor rule that could provide an even more precise guide for central bankers - in effect, a rule that could serve as an " automatic pilot " for monetary policy. in my view, rules, including the taylor rule and its many variations, are useful benchmarks, but following an automatic policy prescribed by any pre - established rule would unnecessarily and undesirably limit the flexibility and judgment necessary in setting monetary policy. i have similar misgivings about other formulaic monetary policy proposals - sometimes referred to as strict inflation targeting - that would require the federal reserve to announce a numerical inflation target or range and conduct monetary policy at all times so as to keep actual inflation close to that objective. in effect, advocates of strict inflation targeting would have the central bank follow