Each of these boxes shed light on important and current issues pertaining to the Turkish economy. I strongly recommend that you read these boxes, which will soon be published on our website. Esteemed Guests, I would like to commence my speech by reviewing the global economic outlook, given its ongoing influence on our policies. As you all know, monetary policy developments in advanced economies were the major factor feeding into volatility in global markets in the third quarter of 2016. In this period, major central banks opted for more monetary easing, yet growing expectations of a possible Fed rate hike and uncertainties surrounding monetary policies of other advanced market central banks stopped the ongoing decline in bond yields (Chart 1). Thus, after a marked upsurge following the previous reporting period, portfolio flows into emerging economies have recently started to slow down again (Chart 2). 1 / 10  BIS central bankers' speeches  In addition to the volatility in global markets, both geopolitical developments and decisions of credit rating agencies caused domestic financial markets to fluctuate over the third quarter of 2016. In this period, Turkey attracted less portfolio flows than other emerging economies, while the Turkish lira depreciated against the US dollar and the country’s risk premium inched up. Overall financial conditions were supported by reduced tightness in monetary conditions, thanks to our policy actions, and macroprudential measures. The gradual fall in the marginal funding rate has partially passed through to loan and deposit rates while consumer loans have edged up in recent months.
In this respect, I would like to commend the ambitiousness of the European Commission’s recent Digital Finance Package and its priorities, in particular those to fight against the fragmentation of the digital single market for financial services and to address the new challenges and risks associated with the digital transformation. With regard to these risks, I think it would be appropriate for the Commission to address the complex but currently unavoidable issue of the oversight framework to be applied to critical IT service providers, including cloud service providers, and the equally important matter of the supervision of issuers and distributors of stablecoins, whether they be single or multi-currency coins. I will not go into detail on the Commission’s proposed legislation, which still requires careful examination on our part and which will, of course, have to be improved by the negotiations that are about to get underway. I simply want to say here that the regulations’ proposals aimed at critical IT service providers and stablecoins include promising provisions: for the former, a dedicated framework that does not exempt financial intermediaries from their responsibilities and their obligation to use European service providers, and for the latter, a strict supervision that involves and associates national and European authorities.