The conventional central banker approach is to build trust through a track record. In recent decades this has been supplemented by greater transparency. But trust is also grounded in familiarity. People trust individuals, places and things that they know. Better reflecting the diversity of the people we serve can reduce misperceptions that we are experts making esoteric decisions in an ivory tower for the benefit of others. Broader outreach to all strata of society across the country can reinforce these benefits. Diversity can make our communication more effective. Homogenous organisations are more likely to fall afoul of the ‘curse of knowledge’, where people assume that their audience has the same information and base level of understanding as themselves. By drawing on alternative perspectives, we can craft our messages so that they resonate with more people. 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  Third, greater diversity leads to better decision making. Homogenous groups are vulnerable to over-optimism, bias and groupthink. They easily become rigid. In contrast, diverse teams can adapt better to change. Such resilience is particularly important in a world where information is super abundant and certainty is absent, and it is especially relevant in finance where most decisions are taken under uncertainty. But diversity alone is insufficient. For its benefits to be realised fully, diverse teams must be supported by the right frameworks.
Our currency did not mark a notable change against emerging market economies competing with Turkey in the exports markets. In this respect, the relatively stable course of the real exchange rate index compared to developing countries underpinned the maintenance of Turkey’s competitive power in foreign trade. As is the case across the world, the Central Bank’s decisions on monetary and exchange rate policy also affects the economy as a whole in Turkey. Under a fixed exchange rate regime, it is possible to control the nominal level of the foreign exchange rate. Nevertheless, under free market conditions, whatever the exchange rate regime and exchange rate policy are, it is impossible to control the real exchange rate level. The real exchange rate level will ultimately move towards the long-term balance level according to the structural features of the economy. In an environment of pressurized nominal foreign exchange rate, this movement will emerge by the changes in the prices of goods and services; i.e. inflation. In countries like Latvia, Estonia, Lithuania, Bulgaria, where a fixed exchange rate regime was implemented, this was experienced before the global crisis and these countries faced the problem of high inflation. We foresee that the distinguishing characteristics of countries will come to the fore in the upcoming period and currencies of those countries with lower risk, stronger economic and financial fundamentals and high growth potential are expected to perform better. Should macroeconomic stability be maintained and structural reforms be put into effect, Turkey will also have a place among these countries.