What are the macroprudential legal powers?
Fatih Özatay, PhD
16 February 2012
By the end 2012, the UK is going to have united the banking regulation authority and the central bank. Important steps are being taken to this end. Almost everyone agrees now that financial stability must be addressed both at the micro (bank) and macro (the entire financial system) level. There was no such distinction before the global crisis. Thus, the relevant institutional infrastructure is not in place. Now the world discusses under which governance structure macroprudential financial policies could show healthier results.
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Contribution to MİT Debate
Nihat Ali Özcan, PhD
16 February 2012
Details of the negotiations carried out behind closed doors between the National Intelligence Organization (MİT) and the PKK have been brought into the open through the police and the judiciary. As in all covert operations, those “secret negotiations” were problematic “morally and legally,” and, as a matter of fact, the allegations are quite serious and shocking for public opinion. Allegedly, MİT had the KCK, a front organization of the PKK, established, operated, and condoned some of its acts. A debate about which accusations are realities, fantasies and mistakes has started.The process was initiated, just like previous “media operations,” by leaking information and documents out, which had to be kept confidential at the investigation phase. Oddly enough, this time the government
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The Financial Stability Committee
Fatih Özatay, PhD
14 February 2012
In order to serve its purpose, the Financial Stability Committee must be revised in terms of its governance structure. In the light of the lessons learned after the global financial crisis, it was argued that central banks shall play a bigger role in preventing, managing and solving crises. Many economists have been pondering on this issue, and as a result a number of studies emerged. In this context, I have been discussing for a long period how macroprudential financial policy and monetary policy can be implemented simultaneously.
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Life is hard for Papademos
Güven Sak, PhD
14 February 2012
These days I would not want to be in the shoes of Greek prime minister Lucas Papademos, and I laud Ecevit. These days, I would not want to be in shoes of Greek prime minister Lucas Papademos. You might ask why. The Greek parliament has adopted the austerity package despite demonstrations throughout the country. The prime minister will collect EUR 130 billion this week. Things have started to get back on track. Still, I would not want to be in his shoes. Let me tell you why. Today, I will note three main challenges I have observed.
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The debate on the reorganization of the BRSA and the CBT
Fatih Özatay, PhD
11 February 2012
My recommendation was either to transfer certain powers of the BRSA to the CBT or unite the two agencies. I have been receiving comments on my recommendation on a new institutional regulation as stated in the conclusion of the search for a new monetary policy series. The institutional recommendation I put forth was that in order to secure that the monetary policy safeguards financial stability, either the Banking Regulation and Supervision Agency (BRSA) shall transfer certain powers to the Central Bank of Turkey (CBT), or the BRSA and the CBT shall be united.
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First world economy, third world budget
Güven Sak, PhD
11 February 2012
No matter how modern the Turkish economy has become in the last three decades, the structure of the Turkish public budget has not changed. After three patients died of HIV-infected blood last week, the chief of Red Crescent in Turkey took a hands-off attitude. “We are distributing what we are getting from society” he said “it is not us, it is society.” This totally neutral and outrageous job description reminds me the accepted motto of our Ministry of Finance. Let me explain why.
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The PSA is putting a spoke in the TCC’s wheel
Güven Sak, PhD
10 February 2012
Each new decree is turning out to be worse than the previous one. Frankly, I am having difficulty understanding the goal. Some while ago, I commented, “What a contrast,” referring to the recent arrangements about the Turkish Commercial Code (TCC) and decrees contradicting with the TCC. I have been watching with astonishment that the current government, which is making an effort to modernize the legislations applicable for the commercial life with the TCC, at the same time, has been trying to advance central tutelage with decrees and therefore has been departing from market-friendly achievements. Each new decree has turned out to be worse than the previous one. Frankly, I am having difficulty understanding the goal. With each new decree, “Turkey is becoming just like China.”
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How will be the mood in 2012?
Fatih Özatay, PhD
09 February 2012
Fund inflows towards Turkey have been rising. Should these circumstances prevail, 2012 growth can be considerably above the official estimate, 4 percent. Readers continue contributing to the discussion on a new institutional regulation as I recommended in the last commentary of “the search for a new monetary policy” series. I will address those on Saturday. The day before, industrial production in December was announced. So today, taking departure from the data, I want to go back to growth forecasts for 2012.
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Syria, Turkey and military intervention
Nihat Ali Özcan, PhD
09 February 2012
The changing nature of the clashes indicates Syria is drifting into a civil war. Long-lasting fights mean more pain for Syrian people. However, without foreign intervention, regime change and a solution seem difficult. How long the fights last will depend on the Syrian military. Unless middle and low ranking officers who form the backbone of the military desert, the military can resume operations to preserve its position. The civilian bureaucracy is also an important factor in that sense. The attitude of the countries that support Bashar and his regime is also important: China, Russia and particularly Iran are extending the current Syrian regime’s life. The political culture and character of the regime indicate the fights will last a long time. In particular the lack of a culture
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Before ships leave the harbor…
Fatih Özatay, PhD
07 February 2012
I am expecting contributions from other readers to publish here before ships leave the harbor. The search for a new monetary policy series recommended a new institutional regulation as conclusion. I have received a couple of comments on this recommendation. One came from my dear friend Baha Karabudak, prominent expert on competition and regulation in Turkey. He has been teaching undergraduate and graduate courses in these areas in the Middle East Technical University and Bilkent University. Following the greeting phase, his letter said:
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