Parallel to the recent global economic developments, the idea that financial stability is a prerequisite for macroeconomic stability and central banks must not ignore risks accumulating in the financial system has become more commonly accepted in international platforms. Financial stability increases the effectiveness of monetary policy while financial instability adversely affects the national economy and the social welfare. Therefore, central banks closely monitor the stability of the financial system.
In this context, the CBRT considers financial stability, that is, the existence of a sound and efficiently functioning financial system, as a vital component of its primary objective of achieving price stability. To this end, the CBRT attaches utmost importance to:
Identifying structural and macroeconomic developments that could pose a systemic threat to financial stability and taking measures against them in cooperation with relevant authorities when it deems necessary,
Monitoring the soundness of the financial system as well as the soundness of each individual institution if necessary,
Following the international developments in financial stability and evaluating these developments with regard to impacts on the Turkish economy
The CBRT approaches financial stability from a macro perspective unlike other supervisory authorities. In addition to the implementation of the monetary policy, the CBRT assumes the responsibility of ensuring the smooth functioning of payment systems and acts as the lender of last resort. Moreover, the CBRT endeavors to establish an effective risk management culture in markets in order to contain the adverse effects of excessive volatility in Turkish lira and foreign exchange markets.