Turalay Kenç: Fostering longstanding relations – opening of the Bundesbank Representative Office in Istanbul Speech by Mr Turalay Kenç, Deputy Governor of the Central Bank of the Republic of Turkey, at the Opening Ceremony of the Bundesbank’s Representative Office, Istanbul, 26 November 2013. *  *  *  Excellency Wolke, Esteemed Dr. Dombret, Distinguished Participants, Ladies and Gentlemen, At the outset, allow me to express the pleasure and appreciation of the Central Bank of Turkey on the occasion of the opening ceremony of the Bundesbank’s Representative Office in our beautiful city of İstanbul. It is a distinct honour for me to have the opportunity to deliver a couple of remarks before distinguished participants in this historical opening event, as this is the first representative office in Turkey of a fellow central bank. First of all, the Central Bank of the Republic of Turkey (CBRT) is very pleased with the signing of the memorandum of understanding (MoU) this year with your esteemed central bank. This is so, not only because the majority of the Bundesbank policies have been regarded as gold standards in central banking, but also because the Bundesbank is the central bank of Germany that is our main trading partner and highest ranking foreign capital provider. The MoU agreement manifests the commitment of both institutions to foster long standing relations.
The main reason is that the single currency has made corporate debt financing more attractive by creating a much larger home-currency investor base than it was the case for any single country of the area before EMU and encouraged international underwriting business for euro-denominated corporate bonds, driving down issuing costs. In 2002, corporate issuance represented about half of the overall bond issuance in the euro area, that is four times more than its share in 1998. In 2002, the gross issuance of eurodenominated bonds accounted for more than a third (38%) of all bond issues (US dollar issues: 47%). Not only have the size of the bond market grown, but also did its liquidity, transparency and standardisation. An increasingly competitive environment, and the development of electronic trading systems, contemporary to the launch of the euro, are among the factors that contributed to these improvements, on the secondary market for government debt initially, and increasingly nowadays on the corporate segment. In that regard, it is worth reminding the success story of the MTS group, an original Italian concept which has translated over a few years into a true pan European electronic platform for fixed-income products with offshoots throughout the continent. Developments witnessed on the short term securities market may appear somewhat uneven and less dynamic. And indeed, efforts remain to be done as regards for instance products characteristics, issuers’ information memoranda settlement practices in order for cross border activity to effectively develop and market integration to gather momentum.