Hence, derivative markets play a crucial role in enlarging the information set used in monetary policy via the information they provide about the future. The critical point here is that while derivatives markets enable the enlargement of the information set required by central banks in making their decisions, on the one hand, they improve the flow of information about the future course of monetary policy needed by economic agents and make contributions in terms of assuring a more predictable monetary policy, on the other hand. Dear Guests, In the framework of the interaction between monetary policy and the derivatives markets, of which I have tried to outline main points, I should clearly state that the development of Turkish Derivatives Exchange will make outstanding and diverse contributions to monetary policy. Transactions in the Turkish Derivatives Exchange will play a key role in the inclusion of quantitative and forward-looking information in Central Bank reports, especially with the transition to full-fledged inflation targeting in 2006. Before I finish, I want to mention a few issues concerning the future of derivatives markets in Turkey. A new era will start with the operations of the Turkish Derivatives Exchange. The main goal in the coming period should be carrying out all the arrangements concerning the functioning of derivatives markets with the utmost care while bearing in mind that these markets act as a catalyst for the whole economy. Moreover, measures should be taken in order to direct banks and firms towards transacting in these markets.
For example, the market for derivatives encompasses more human capital (in the form of law experts writing contracts) than physical capital. Given the dominance of UK law, this would tend to encourage activity in London. Finally, regulatory changes may have played a role. London became the main trading centre for the Eurodollar market in the 1960s. The City went through a wave of deregulation in the 1980s and beginning of the 1990s which may have contributed to its position as a global financial centre. All of these drivers are likely to have played a part in concentrating financial market activity in London. And indeed they are likely to have been mutually reinforcing. The social license for financial markets  I have described at some length why concentrations of financial services develop and the economies of scale, lower costs and greater efficiency they should bring. In the case of financial markets and financial centres, however, one does have to ask the question, ‘for whose benefit’? Financial services exist, as we would all agree, to serve the real economy by channeling savings to investment, by providing insurance and by facilitating economic activity and trade.