Even though during the early years of the Exchange Market’s operation in the 1860’s, the amount of foreign direct investment in Turkey was negligible, foreign capital was being encouraged to form joint stock companies. Up until the beginning of the 20th century, the Market helped the government find funds to finance its obligations. In 1906, the Istanbul Exchange Market was re-organised and once more became a source of new capital for young private ventures. BIS Review 42/1997  -2-  Without giving the whole history of the Istanbul Exchange Market, I want to emphasise that Turkey’s experience with free markets did not begin in 1980 but goes back more than a century before. What the reforms of 1980 did accomplish was to institutionalise the markets and put them on a solid legal footing. Besides liberalisation, the structural reforms begun in 1980 included measures providing investment and tax incentives. I would like to review these issues briefly. The aims of these incentives were to encourage activities that would earn foreign exchange on the one hand, and to help foreign sources of capital finance investments in Turkey on the other. It can be said that by liberalising its capital account and introducing structural tax changes to improve investment returns, Turkey issued an invitation to foreign capital.
Taking these in turn, data form the core of all AI models and good data management and data governance are essential in controlling issues with, for example, biases that may be embedded in the data. At the model level, we need to think about issues such as ensuring that models continue to perform under a wide range of different conditions and being able to explain the outputs of complex AI systems. Moving to the firm level, some of the key issues will revolve around risk management and governance structures; around accountability and appropriate controls. And finally, for the financial system as a whole, AI may amplify network effects such as unexpected changes in the scale and direction of market moves. In terms of the regulatory challenges, it’s clear that policy thinking in this arena is also evolving rapidly. But the existing regulatory landscape is somewhat fragmented when it comes to AI, with different pieces of regulation applying to different aspects of the AI pipeline, from data through model risk to governance. Policy must strike a balance between high-level principles and a more rules-based approach. We also need to future-proof our policy initiatives in a fast-changing field. With all that in mind, and in order to further our objective of promoting the safe adoption of AI in financial services, the Bank of England, along with the Financial Conduct Authority, is today launching the Artificial Intelligence Public-Private Forum.