Despite the consensus among policy-makers on the importance of financial stability, the economic literature lacks adequate theoretical and empirical studies on the details of the transmission mechanism from financial stability to macroeconomic stability. At this point, academia is expected to do their share in this respect. The two-day conference will stage parallel sessions, panel discussions and presentations on these issues. Banking sector dynamics, macroprudential measures and their impact on macroeconomic stability, systemic risk issue and sovereign debt dynamics are among the topics that will be addressed at the conference. Two of our distinguished guests, Mr. Ricardo Caballero and Mr. Franklin Allen, will be delivering speeches. Mr. Caballero will be presenting a speech on the first day of the conference and Mr. Allen’s presentation is scheduled for the second day. On the second day of the conference, the panel discussion titled “How did the crisis challenge the Central Banking as we knew it? What should (not) change?” will be held, at which senior central bankers will be sharing their country experiences. I think this panel discussion will be very interesting and beneficial for all the participants. The studies that will be presented throughout the conference will contribute to better understanding of the factors threatening financial and macroeconomic stability and developing policies to achieve these two objectives simultaneously. I believe that the conference will also serve as a forum for the participants for exchanging views.
Erdem Başçi: Financial and macroeconomic stability Speech by Mr Erdem Başçi, Governor of the Central Bank of the Republic of Turkey, at a conference on “Financial and macroeconomic stability”, organised by the Central Bank of the Republic of Turkey jointly with the Central Bank of Brazil, the Bank of Finland and the Journal of Financial Stability, Istanbul, 4 June 2012. *  *  *  Distinguished Guests, Welcome to the conference on Financial and Macroeconomic Stability, organized by the Central Bank of the Republic of Turkey jointly with the Central Bank of Brazil, the Bank of Finland and Journal of Financial Stability. In November last year, we organized yet another conference on Financial Stability and Inflation Targeting, with a focus on financial stability. Country experiences since then have shown once more how costly it would be economically and socially if and when financial stability is neglected. Therefore, financial stability is of utmost importance for policymakers in attaining macroeconomic stability. As a matter of fact, this conviction, which is also supported by international platforms such as G20, IMF and BIS, has not only raised several new questions regarding the design and implementation of monetary policy, but also proposed a new research agenda in the academic literature. Esteemed Participants, Sustainable growth, low inflation, steady employment growth, low levels of unemployment and a balanced public finance can be listed as the main indicators of macroeconomic stability.