In Turkey, a number of authorities are responsible for financial stability and implement macroprudential policies for the monitoring and management of systemic risks in particular.
These authorities and their duties, mandates and responsibilities regarding financial stability are given below:
|Relevant Authority||Area of Responsibility|
|The CBRT||Implementation of monetary policy and exchange rate regime to achieve price stability and financial stability, and management and supervision of payment and settlement systems|
|Banking Regulation and Supervision Agency (BRSA)||Regulation and supervision of activities of all banks, financial holding companies, leasing companies, factoring companies and financing companies|
|Undersecretariat of Treasury (UT)||Public finance, fiscal policy, and regulation and supervision of insurance companies|
|Capital Markets Board (CMB)||Regulation and supervision of capital markets and intermediary institutions|
|Savings Deposit Insurance Fund (SDIF)||Protection of the rights and interests of deposit holders, and resolution of banks|
A range of cooperation and information sharing protocols between the Undersecretariat of Treasury, BRSA, CMB, SDIF and CBRT enhance the cooperation, coordination, and information sharing among these authorities. This cooperation contributes to achieving and maintaining financial stability, and to monitoring and managing systemic risks.
In addition to these authorities, other important organizations such as the Financial Stability Committee and the Financial Sector Commission also develop policies oriented towards reducing systemic and macro risks in Turkey.
Financial Stability Committee
In line with the developments on the international platform and the needs triggered by the global financial crisis, the Financial Stability Committee (the Committee) was established under the chair of the Minister responsible for the Undersecretariat of Treasury. The Members of the Committee are the Undersecretary of Treasury, Governor of the CBRT, Chairmen of BRSA, CMB, and SDIF. The key responsibilities of the Committee are to monitor and prevent systemic risks, and ensure coordination in systemic risk management.
- Detect and monitor systemic risks which could spill over to the whole financial system, and identify necessary measures and policy proposals to mitigate these risks,
- Warn the concerned parties about systemic risks, and follow the implementations related to these warnings and policy proposals,
- Assess systemic risk management plans prepared by related institutions,
- Ensure coordination in systemic risk management,
- Collect all sorts of data and information related to its mandate from public institutions, and ensure coordination of policies and implementations among institutions,
- Make decisions on other issues that fall within the scope of its mandate under the legislation.
Other ministers and public officials can also be invited to the Committee meetings by the Minister depending on the scope and nature of the issues to be discussed. In addition, the Minister, in his/her capacity as the chair of the Committee, briefs the Council of Ministers on the results of the Committee meetings and the decisions made by the Committee.
On the other hand, working subgroups conduct detailed research and studies on issues related to financial stability. The secretariat of the Committee is carried out by the Undersecretariat of Treasury.
The establishment of the Committee is an important step for Turkey in terms of rendering a corporate structure in the coordination among institutions and creating an effective communication channel. Moreover, the Financial Stability Committee plays a significant role in the design of macroprudential policies.
Financial Sector Commission
The Financial Sector Commission (the Commission) is composed of representatives of the BRSA, CBRT, Ministry of Finance, Undersecretariat of Treasury, CMB, SDIF, Competition Authority, Ministry of Development, Borsa Istanbul, Banks Association of Turkey, and Participation Banks Association of Turkey.
With this broad membership, the Commission undertakes the following tasks:
- Ensuring exchange of information, cooperation and coordination among institutions to maintain trust and stability in financial markets,
- Proposing joint policies,
- Expressing views on the matters related to the future of the financial sector.
The Financial Sector Commission convenes at least twice a year, and briefs the Council of Ministers on the results of its meetings. The secretariat of the Commission is carried out by the BRSA.