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2.9 International Cooperation and Events
Founded on our initiative, the Central Bank Governors’ Club of Central Asia, Black Sea Region and Balkan Countries met for the 41st time in Istanbul on 24‑26 March 2019. The secretarial work was undertaken and the meeting was hosted by the CBRT. The 42nd meeting was held in Prague on 20‑22 November 2019. The main themes of the meetings were determined as global economic and financial developments, matters regarding central bank governance, central banking communication for policy effectiveness as well as inflation targeting regime in advanced and emerging economies and data management concerning monetary policies.
To increase cooperation among the Governors’ Club member countries and to help with the preparations of the Governors’ Club meetings, the “Monetary Policy and Financial Stability Working Group,” established on the initiative of the CBRT and co-chaired by the Bank of Russia and the CBRT, held the third meeting in Istanbul on 28 January 2019, and the fourth one in Prague on 16 September 2019.
Pioneered by the CBRT, “OIC Economic Outlook” and Financial Inclusion” working groups established under the Organization of Islamic Cooperation (OIC) held their second meetings on 17 and 18 June 2019 in Istanbul. Alongside financial inclusion, economic and global developments were handled specifically for the OIC geography in these meetings. Co-chaired by the CBRT and the State Bank of Pakistan, the OIC Economic Outlook Working Group formed OIC financial stress and OIC macro financial fragility indices. Reports compiled as the outputs of the working groups were presented to the Central Bank Governors at the D İSEDAK Central Banks Forum Meeting. This meeting was held from 22 to 24 September 2019 in Bodrum. At this meeting, the network site established by the CBRT was introduced to the member central banks.
As part of the routine Article IV consultations with 189 members, an IMF delegation visited Turkey in September to discuss economic and fiscal policies and the surveillance of the international monetary system. During this visit, meetings were coordinated by the CBRT and the Ministry of Treasury and Finance.
Preparatory work was also carried out on the agendas of the periodical meetings held by the IMF, G20 and the BIS.
The Bank continued to seek stronger communication and bilateral cooperation with foreign central banks. Accordingly, with the new memorandum of understanding signed with the Central Bank of Somalia, the number of central banks with which the CBRT collaborates officially reached 32 in 2019. Additionally, the memorandum of understanding signed with Bank Indonesia in 2015 was updated in view of the current state of bilateral cooperation.
Efforts to vigorously implement the newly-signed memorandums in their first years continued. To this end, particular attention was given to strengthen collaborations with central banks of Romania, Moldova, Hungary, Sudan and Kosovo, with which the CBRT signed memorandums of understanding in 2018. On the other hand, considering the priorities of CBRT departments as well as the demands from the Bank’s global partners, steps were taken to foster collaboration with the central banks with which CBRT doesn’t have a memorandum of understanding.
In line with the national policy to encourage the use of local currencies in international trade, and to enhance a wider use of the Turkish lira across the globe, the CBRT continues to work with partner central banks on bilateral swap agreements. As part of these efforts, the swap agreement signed with the People’s Bank of China in 2012 for the first time was renewed for a three-year period in May 2019. In addition, an amendment agreement to update the existing swap agreement with Qatar Central Bank was signed during the Republic of Turkey and the State of Qatar High Strategic Committee Meeting held in Doha on 25 November 2019.
Activities in 2019 were programmed with an approach focused on obtaining tangible outputs for the CBRT’s strategic objectives, as well as prioritized projects launched by CBRT departments. In this respect, among the CBRT’s international partners, more intensive cooperation programs were conducted with the European Central Bank, Banca D’Italia, National Bank of Ukraine and Central Bank of Brazil. Further efforts were made to enhance cooperation and strengthen professional networks with other partners in view of mutual needs. To make use of time and cost advantages that information technologies offer in cooperation activities, some programs were realized through video conferences. Accordingly, within the framework of the bilateral cooperation strategy of the CBRT, 68 cooperation programs were organized in Turkey and abroad with 33 partner central banks, 52 of which were study visits.
Established in 2017 to enhance the effectiveness of the cooperation between the CBRT and foreign central banks and to allow the CBRT departments to benefit more from such cooperation, the “Committee of Cooperation with Central Banks” met four times within the year. At these meetings, the committee assessed the activities held in 2018 and planned for 2019 and discussed expectations from departments regarding cooperation. Moreover, throughout the year, the committee shared periodic updates on cooperation with foreign central banks, assessed department demands and worked on the cooperation planning schedule for 2020.
The Regional Central Banking Forum, which facilitates sharing of experiences on contemporary issues by countries with common geographical, cultural and economic backgrounds in a multilateral platform, convened for the third time in 2019. High level representatives from the central banks of Eastern Europe, the Balkans and the Black Sea Region exchanged information and experiences on this year’s topic “Internal Audit: Trends and Challenges”.
As part of continuous mutual dialogue at the highest level, bilateral meetings were organized with Governors and Deputy Governors of the central banks of Kosovo, Singapore, Qatar, Indonesia, Russia, China, Italy and Somalia. Items of mutual interest as well as economic outlook and opportunities for bilateral cooperation were the main agendas of these meetings.
Bilateral working committees serve as another mechanism by means of which the CBRT is able to engage in dialogue with foreign central banks. As part of this dialogue the Ninth Meeting of the “Turkish-Russian Working Group on Banking and Financial Cooperation” was hosted by the CBRT in Istanbul on 16‑17 July 2019. At this meeting, discussions centered around how to encourage trade in local currencies, accompanied by a strengthened correspondent banking relationship as well as current and future steps to enhance the cooperation between the financial sectors of both countries.
As a bureau member of the Organization of Economic Cooperation and Development (OECD) “International Investment Statistics Working Group”, the CBRT attended and contributed to the meeting on 26‑28 March 2019 and to the “International Trade of Goods and Services Statistics Working Group” meeting on 27‑29 March 2019.
The World Bank’s International Committee on Credit Reporting (ICCR), of which the CBRT has been a member since 2009, held its periodical meeting in France on 4‑5 April 2019. These meetings were attended by representatives mostly from central banks and from international credit reporting agencies and unions. Moreover, the CBRT official was selected to participate in the subcommittees on “Innovations in Credit Reporting” and “Management and Administration”, and also contribution was made to the completion of the document on the overall coverage of credit rating.
The CBRT attended the annual meeting of the “G 20 Data Gaps Initiative” held in Washington D.C., USA on 12‑13 June 2019 and contributed to the “Progress Report 2019”.
The CBRT participated in and contributed to the 4th Asia Pacific Statistics Week held by the United Nations Economic and Social Commission for Asia and Pacific (ESCAP) Committee on Statistics on 17‑21 June 2019 as a member of the Working Group. Being a member of the Economic Statistics Regional Program Executive Group, the CBRT took part in and contributed to the Executive Group Meeting, and chaired the Economic Statistics Capacity Assessment Working Group.
Being a member of the “FinTech -related (Financial Technologies) data issues Working Group” at the BIS-Irving Fisher Committee on Central Bank Statistics (IFC), the CBRT took part in the studies on the effect of the developments in FinTech on central bank statistics. Similarly, the CBRT attended and contributed to the FinTech Statistics seminar on “Bringing Together Demand and Supply to Measure Its Impact” organized jointly by the BIS IFC and Central Bank of Malaysia on 17 August 2019.
The CBRT is a member of the European Committee of Central Balance-Sheet Data Offices (ECCBSO) created to enhance cooperation among balance sheet offices operating under European central banks, develop data processing techniques and analyses and establish comparable datasets. In 2019, the Bank took part in the Working Group Meetings of BACH, FSA and ERICA operating under the ECCBSO and chaired the FSA Working Group. Additionally, the last meeting of the ERICA group in 2019 was hosted by the CBRT.
As Turkey’s representative since 2009, the CBRT participated in and contributed to meetings of the Steering Committee operating under the BIS held by the CPMI in February and May. Additionally, the CBRT took part in activities and meetings of the working groups established at the CPMI. Some working groups in which the CBRT participates published their final reports in 2019 and have been working as required by their task definitions. Accordingly:
The CBRT contributed to the studies of the G7 Stablecoins Working Group. Moreover, 16 September 2019, the BIS hosted a conference and senior officials from public authorities worldwide discussed policy and regulatory issues posed by the emergence of “stablecoin” initiatives backed by financial institutions and large technology companies.
A report on the analysis of Stablecoin arrangements within the scope of the PFMI is in progress. Given that cross-border payments are a priority for the G20 in 2020, the “Global Cross Border Payments Task Force” was established at the CPMI with the participation of representatives of many countries including Turkey. The report to be written by the group that launched studies in December is planned to be represented at the G20 Finance Ministers and Central bank Governors Meeting in October 2020.
The CBRT is a member of the “European Banknote Conference” working on banknote printing and cash management organized by the European central banks and printing houses. Accordingly, the Bank conducted studies in the technical sub units of this conference: “Banknote Security Committee”, “Banknote Materials Committee” and “Manufacturing Process Committee”. In addition, representatives from the CBRT also took part in the activities of the “Policy Committee Advisor Group”, which is responsible for assessing the effectiveness of the conference’s management and operations.
As a member, the CBRT attended the annual meeting of the Technical Working Group which is the technical subgroup of the KBA NotaSys Customer Focus Group aiming at establishing technical cooperation among banknote production machinery users. The meeting was organized by KBA NotaSys, the producer and supplier of a great part of the machinery used in banknote production at a global scale.
To enable exchange of views and experience among the users of banknote processing systems (BPS) and the renovation of the systems parallel to technological improvements, representatives from the central banks and banknote printing plants using the BPS machinery established the “BPS International Users Group”. Its technical task force, the “BPS Technical Advisory Group” holds biannual meetings, and as a member, the CBRT attended one of these meetings, which was organized by Giesecke & Devrient, a company of German origin.
The CBRT participated in the Users Meeting held by the Central Bank Counterfeit Deterrence Group (CBCDG), of which it is a member, in Frankfurt-Germany on 18‑20 March 2019 and the Plenary Meetings held in Basel Switzerland on 5 December 2019. CBCDG Plenary Meetings are held annually and are attended by the European Banknote Conference delegation presidents of member countries and representatives of members other than the European Banknote Conference. At the meetings, the CBCDG activities are explained, decisions are taken and the CBCDG budget is approved.
Being a member of the BIS IFC Executive Committee, the CBRT attended meetings and contributed to activity reports and presentations.
The final report for the “Workshop on Commercial Property Price Indices” co-organized by the BIS IFC was written jointly by the BIS and the CBRT. The report was published as an IFC Report entitled “Mind the Data Gap: Commercial Property Prices for Policy”.
The CBRT participated in and contributed to the seminar on “Post-crisis data landscape: micro data for the macro world” held on 16 August 2019 by the BIS IFC, Central Bank of Malaysia and the European Central Bank.
Some sessions were chaired and presentations were made at the 62nd World Statistics Congress held by the International Statistical Institute in Malaysia on 19‑23 August 2019.
National and International Organizations
To foster mutual relations and cooperation with other countries’ central banks and international agencies and organizations, the CBRT conducted meetings, conferences, seminars and workshops for the discussion of current issues on the world’s and Turkey’s economic agendas.
Events attended by the world’s leading academicians, central bank and financial industry representatives, central bankers and officials of international organizations last year are highlighted below:
CBRT Organizations
The following meetings and workshops were organized to foster collaboration both within and among departments and improve work processes within the CBRT:
National and International Organizations That the Governor and Deputy Governors Attended
To represent Turkey and exchange views on matters of economy and finance in international platforms the CBRT participated in the following meetings. Moreover, meetings were organized with investor groups throughout the year.
Turkey’s screening process, which is the first phase of EU accession negotiations after Turkey was given a candidate country status by the EU, began on 3 October 2005 and ended on 13 October 2006. The EU harmonization process of Turkey continues, although no significant progress has been made.
The current situation in EU Chapters that directly concern the CBRT is as follows: negotiations on chapters “18. Statistics” and “32. Financial Control” were opened on 26 June 2007, while chapters “4. Free Movement of Capital” and “17. Economic and Monetary Policy” were opened to negotiations on 19 December 2008 and 14 December 2015, respectively. Chapter “9. Financial Services” is one of the eight chapters that were suspended by a resolution passed at the EU summit of 14-15 December 2006, mandating that their negotiations be blocked until the EU Commission verifies that Turkey fulfills its commitments with respect to Southern Cyprus. Nevertheless, in the framework of harmonization with the EU acquis in Chapter 9, on 27 June 2013, Turkey put into force the Law No. 6493 regarding Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions. This Law also provides harmonization with the relevant EU legislation in Chapter “4. Free Movement of Capital.” Chapter “33. Financial and Budgetary Provisions” was opened to negotiations on 30 June 2016. However, one more technical criterion has been introduced for the provisional closure of these negotiations in addition to the full implementation of the Annex Protocol.
Since the onset of technical negotiations with the European Commission, three of six closing benchmarks for Chapter “32. Financial Control” have been satisfied. Of these three benchmarks, the CBRT has contributed to the closing criterion of “legal and administrative alignment with the Council Regulation (EC) 1338/2001 laying down measures necessary for the protection of the euro against counterfeiting.” Among the chapters with which the CBRT is indirectly involved, Chapter “28. Consumer and Health Protection” was opened to negotiations on 19 December 2007, Chapter “6. Company Law” on 17 June 2008, and Chapter “16. Taxation” on 30 June 2009. Opening benchmarks have been established for Chapter “19. Social Policy and Employment,” while Chapter “2. Free Movement of Workers” is still under review by the European Council.
The CBRT continues to provide the Turkish Ministry of Foreign Affairs, Directorate for EU Affairs with information concerning the developments in the chapters for which it is responsible so that the Ministry can monitor the progress being made in Turkey’s harmonization with the EU Acquis and forward this information to the European Commission.
Furthermore, the Bank remained in economic and financial dialogue with the EU. On 24 April 2019, an “Economic and Financial Dialogue” meeting of experts was held in Brussels. At the meeting, participants discussed assessments of the progress that Western Balkan countries and Turkey had made in the first phase of their Economic Reform Programs (ERP) and the countries’ responses to the assessments and corrections they requested to be made in the European Commission’s final declaration.
On 2 May 2019, a meeting of high-level officials was held in Brussels as part of the Economic and Financial Dialogue between the EU and the Western Balkans and Turkey. During this meeting, participants debated a Draft Joint conclusion prepared by the Economic and Financial Committee (EFC) secretariat concerning candidate countries (Albania, Macedonia, Montenegro, Serbia, Bosnia Herzegovina, Kosovo and Turkey) that had been drawn up at the 24 April 2019 meeting of EFC experts. At this meeting, the text of the joint conclusion was finalized for submission and approval at the Economic and Financial Dialogue between the EU and the Western Balkans and Turkey Meeting.
On 17 May 2019, a meeting of Economic and Financial Dialogue between the EU and the Western Balkans and Turkey was held in Brussels. This meeting, which is the highest-level meeting with respect to economic dialogue between the EU and candidate countries, was attended by economy/finance ministers of member and candidate states. At this meeting, the text of the joint conclusion prepared at the EFC High-Level Officials Meeting that took place on 2 May 2019 was approved.
On the other hand, the spring and fall Economic Forecast by Candidate Countries meetings that are held twice a year in Brussels by the European Commission took place on 4 April and 9 October 2019, respectively. During these meetings, EU Commission economists and other participants discussed economic and financial forecasts, data and information on related matters.
Moreover, the Subcommittee No. 4 on Economic and Monetary Issues, Capital Movements and Statistics, one of the eight subcommittees established on 11 April 2000 with the Decision No. 3/2000 of the EC-Turkey Association Council to monitor the progress regarding the Turkey’s harmonization with the EU acquis, held its 16th meeting on 26 September 2019 in Brussels.
