Putting the structural reforms that would remedy chronic problems in the labor market into practice immediately would prevent unemployment rates, which climbed during the crises, from becoming permanent and support potential economic growth. The lending appetite of banks significantly decreased due to the decline in risk appetite accompanied by the erosion of confidence and elevated uncertainties during the crisis. However, we can assert that there are favorable developments thanks to policy rate cuts made since November 2008 and the improvement in global risk perceptions. Especially the most recent developments suggest that there is an apparent improvement in Commercial Loans. The rise in loans extended to SMEs, which have an important share in the labor market, indicates that there is moderate recovery in economic activity. The NPL ratios, which saw all time highs during the crisis, started to decrease, albeit slowly and gradually. To sum up, the upward trend in bank loans, which started in the second quarter of 2009, continues on a stable course. As you all know, the impact of the global economic crisis on financial markets was terribly severe in the last quarter of 2008: countries’ risk premia saw record-high levels and excessive volatilities occurred in the currencies of many developing countries. Despite having been volatile at historically high levels and extremely sensitive to the global risk appetite, the Turkish lira displayed a relatively stable course, which lasted through the first quarter of 2010 following the peak of the crisis.
In this context, primarily the measures taken in direct crisis management will be withdrawn, and, as is the case in the rest of the world, the exit strategy will be a cautious and gradual process that safeguards financial stability in our country as well. I would like to end my remarks by extending my regards to all the participating academicians and policy-makers for their contributions to the “Global Crises and Economic Governance” congress. Also, I would like to thank, once more, the staff of İnönü University and everybody for their contributions to the conference. BIS Review 79/2010  7