In particular, the use of resolution tools like the bail-in when financial markets are in distress could exacerbate those turbulences and reduce the ability of other banks to obtain external financial resources. Or, in the case of the sale of the business, it could create a problem of fire sales that may additionally reduce the prices of the assets, generating losses for the rest of the institutions. In these circumstances, there should be a powerful, usable and credible backstop that could be activated even preemptively. The stability of the financial system and the potential for systemic risks to alter the functioning of that system have long been important topics for central banks, and I would like to encourage some additional consideration to this broader approach. Some episodes, including the Spanish experience during the Great Financial Crisis, suggest that the propagation of shocks is especially relevant for mid-sized entities and that the swift and orderly resolution of the problems is the vaccine against contagion. So, allow me to finish my presentation where I started: the current crisis management framework has been crucial in advancing the Banking Union and it has proven most useful in resolving very relevant events. However, the experience allows us to draw lessons that should be incorporated into the framework to contribute more effectively to maintaining financial stability and to ensuring the functioning of the Banking Union.
In every platform we participated and in every announcement we made, we emphasized our policy objective, which is to achieve and maintain price stability, the reasons underlying our policy implementations and the importance of having a medium-term vision in terms of lagged effect of policy decisions. To this end, we try to use communication policy effectively as an important part of the inflationtargeting regime. We base our communication policy on the grounds of trust, transparency, consistency and decisiveness. I believe this is not peculiar to the Turkish case. Many central bankers in emerging market countries have to deal with the drawbacks of a past of high and chronic inflation and thus incredible policies. And it is by all means clear that designing a communication strategy is not easy under these circumstances. As you may all agree, the concept of communication itself is a dynamic issue. Therefore, given the importance of effective communication, it is important to note that we at the Central Bank of Turkey have been working continuously on improving our communication policy. 5  Woodford, M. (2003). Interest and Prices. Princeton Univesity Press. 6  BIS. (1998). “The Transmission of Monetary Policy in Emerging Market Economies”. BIS Policy Papers No. 3. 7  Orphanides, A. (2006). “The Road to Price Stability”. BIS Review 88/2006  5  Dear guests, There is no doubt that central banking can be considered as a combination of positive sciences and human psychology, or as you could say, the union of science and art.