Conference on
Incorporating Financial Stability into Inflation Targeting

November 25-26, 2011, Istanbul
Grand Hyatt Istanbul

Participation to the conference is by invitation only.

The Central Bank of the Republic of Turkey is organizing a conference on “Incorporating Financial Stability into Inflation Targeting” on November 25-26, 2011, in Istanbul. The conference will bring central bankers and economists at other policy institutions together with academics to present recent advances in theoretical and empirical work on the interaction between financial stability and monetary policy. The main objective of the conference is to discuss new challenges faced by central banks in the aftermath of the global financial crisis.

The sessions are organized around two central themes. First theme is on how monetary transmission mechanism would work in a setup that incorporates financial intermediation and financial markets. Transmission channels of macroprudential policy instruments, such as reserve requirements, capital adequacy ratios, loan-to-value ratios, liquidity requirements, or taxes on certain types of short-term capital flows, and policy coordination between central banks and financial/banking supervisors are all within the scope of this theme. Second theme is on the operational framework for incorporating financial stability into an inflation targeting framework. This theme is supported also by country experiences and case studies.


Incorporating Financial Stability into Inflation Targeting


Friday, November 25, 2011


8:00 – 9:00



9:00 – 9:15

Opening remarks

Erdem Başçı, Governor, Central Bank of the Republic of Turkey



9:15 – 10:00

Keynote address

Central banking post-crisis: beyond inflation targeting?

Claudio Borio, Bank for International Settlements (BIS)



10:00 – 10:30

Coffee break



Session 1
Financial Markets and Macroeconomic Dynamics

Session chair: Şebnem Kalemli-Özcan, Koç University, Harvard University, NBER, CEPR


10:30 – 11:10

Macro-financial linkages: evidence and policy

Ayhan Köse, International Monetary Fund (IMF)


11:10 – 11:50

Bank leverage regulation and macroeconomic dynamics

Césaire Meh, Bank of Canada

Paper | Presentation


11:50 – 12:30

Reserve requirements for macroeconomic and financial stability – when are they effective?

Pascal Towbin, Bank of France

Paper | Presentation


12:30 – 14:00



14:00 – 14:15

Photography session



14:15 – 15:00

Keynote address

Risk shocks

Lawrence Christiano, Northwestern University



15:00 – 15:30

Coffee break



Session 2
Incorporating Financial Stability into Macroeconomic Policies

Session chair: Mehmet Yörükoğlu, Central Bank of the Republic of Turkey


15:30 – 16:10

Issues in extending inflation forecast targeting regimes with countercylical macro prudential rules

Douglas Laxton, International Monetary Fund (IMF)



16:10 – 16:50

Macroprudential policy and the conduct of monetary policy

Benoît Mojon, Bank of France

Paper | Presentation


16:50 – 17:30

Curbing the credit cycle: the role of countercyclical macroprudential policies

David Aikman, Bank of England

Paper | Presentation


17:30 – 18:10

Liquidity policies and bank lending

Timur Hülagü, Central Bank of the Republic of Turkey




Saturday, November 26, 2011


9:00 – 9:45

Keynote address

The credit-to-GDP gap and systemic risk

Frank Smets, European Central Bank (ECB)




Session 3
Financial Crisis and Macroprudential Policies

Session chair: Turalay Kenç, Central Bank of the Republic of Turkey


9:45 – 10:25

Monetary and macroprudential policies: an integrated analysis

Gianluca Benigno, London School of Economics

Paper | Presentation


10:25 – 11:05

Macroprudential regulation versus mopping up after the crash

Anton Korinek, University of Maryland

Paper | Presentation


11:05 – 11:35

Coffee break



Panel Session
Capital Flows and the Interaction between Macroprudential Policies and Monetary Policy

Session chair: Erdem Başçı, Central Bank of the Republic of Turkey


11:35 – 13:15

José De Gregorio Rebeco, Governor, Central Bank of Chile


Luiz Awazu Pereira da Silva, Deputy Governor, Central Bank of Brazil



Erdem Başçı, Governor, Central Bank of the Republic of Turkey




For questions and further information please contact