And shouldn’t it also depend on the kind of vehicle? One could easily think of many more questions like these. So even a seemingly simple rule can quickly start to become more and more complicated. The world is complex and uncertain, particularly when it comes to finance and banking. That leaves us with two options. Either we come up with more rules to try to cover every potential situation. Or we allow supervisors some discretion within a set framework and let them judge specific situations on their merits. In the end, these two options need to be in balance, and we must be careful not to disturb this balance. And here is where I see some cause for concern. Regulators might be tempted to lay down rules to cover every eventuality – think of the example I just gave you. And their motivation would certainly be laudable. But their goal would be unattainable. It is just not possible to cater for every potential situation. There are too many possibilities, most of which we cannot anticipate. No one knows what financial innovations might emerge; no one knows where technological change will lead us; and no one knows how the economy will evolve over the coming decades. If we try to cover everything, the rulebook will, at some point, become too detailed, too big and too complex. From that point onwards it will stop making the banking sector a safer place and instead create new problems. First, overly complex rules facilitate regulatory arbitrage.
In the spirit of the MoU agreement, a primary step in our cooperation is to establish high level policy dialogue with the Bundesbank on a regular basis, the first of which will be held in 2014. This is timely, considering that not only will Turkey assume the G20 presidency in 2015 and engage in an even closer interaction with the central banks of the G20 member states, but will also help meet the recently increased need for policy dialogues over the implementation and implications of new unconventional monetary policies. In general, the CBRT places great emphasis on bilateral relations with fellow central banks, especially those of the G20 member countries. The year 2012 is a testament to our commitment, as the CBRT opened six new representative offices, which brought the total number to ten. The first-round representative offices include those in Frankfurt, NY City, London and Tokyo. The ones opened later on are in Moscow and Sydney – to strengthen relations with other G20 presidency countries; Beijing and Kuala Lumpur – to strengthen relations with the Asian countries; Paris – to strengthen relations with the OECD, and finally Washington, DC – to strengthen relations with the IMF. In her efforts to enhance regional cooperation, the CBRT laid the foundations of the dialogue among central banks that paved the way for the establishment of the Central Banks Governors’ Club of Central Asia, the Black Sea Region and the Balkan Countries.