[2] This speech builds on the recently published ECB Discussion Paper “Money Markets, Central Bank Balance Sheet and Regulation”; see Corradin, S., Eisenschmidt, J., Hoerova, M., Linzert, T., Schepens, G. and Sigaux, J.-D. (2020), “Money Markets, Central Bank Balance Sheet and Regulation”, ECB Discussion Paper No. 2483. [3] A non-bank financial institution is a financial institution that does not provide the traditional banking intermediation role, in particular it does not accept demand deposits from the public. Examples of non-bank financial institutions are investment funds, money market funds, central clearing counterparties (CCPs), insurance companies, pension funds and hedge funds. [4] There are several channels through which money market conditions affect lending conditions. For example, the conference paper by Corbae and Gofman (2019) points out one novel channel, namely that interbank markets provide a channel for banks to collude in the market for business loans; see Corbae, D and Gofman, M. (2020). “Interbank Trading, Collusion, and Financial Regulation”, Working Paper. Altavilla, Carboni, Lenza, and Uhlig (2019) document that the cross-sectional dispersion in unsecured interbank money market rates significantly raises lending rates banks charge to firms, with a peak effect of around 100 basis points during the global financial crisis and the euro area sovereign debt crisis; see Altavilla, C., Carboni, G., Lenza, M. and Uhlig, H. (2019), “Interbank Rate Uncertainty and Bank Lending,” ECB Working Paper No 2311. [5] See Heider, F., Hoerova, M. and Holthausen, C. (2015), “Liquidity Hoarding and Interbank Market Spreads: The Role of Counterparty Risk”, Journal of Financial Economics, 118(2), pp. 336-354.
The regional cooperation agreement to be  2  BIS central bankers’ speeches  signed at the ShamGen Banking Conference will complement these agreements and enhance their effectiveness. The Turkish Banking Sector, which was restructured following the 2001 economic crisis, managed to overcome the global crisis with no apparent damage and verified its outstanding resilience. Turkish banks are also interested in venture opportunities in the Middle East and will contribute substantially to the betterment of the banking systems of the region countries. Moreover, I am of the opinion that also the participation banks in Turkey operating through the interest-free system will not only contribute to but also benefit from cooperation among these countries. Intended as a long-term formation, the common market calls for not only political and economic, but also cultural cooperation. The fact that it is easier to establish commercial and economic cooperation between closer cultures is supported by both history and academic studies. Therefore I believe, it is significant that this conference is organized in İstanbul, a city that has hosted a great diversity of cultures in the past, as well as being the European capital of culture in 2010. At the end of this conference, a city tour will be organized for our guests who would like to get to know İstanbul better. I hope that you all enjoy this beautiful city. BIS central bankers’ speeches  3