Download I. International and Domestic Developments Affecting Financial Stability

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Türkiye Cumhuriyet Merkez Bankası
I. International and Domestic
Developments Affecting Financial
diffe
Infla
eco
Stability
poli
is a
The recovery in global economic activity is still sluggish
and the differences between countries’ growth trends are
mon
remarkable. Inflation rates remain low on the back of the weak
also
outlook in economic activity and the fall in oil prices. Although
adv
monetary policies of advanced economies continue to support
suffi
growth, there is a policy divergence between the Fed and the
ECB. However, the monetary easing policies implemented to
con
back the recovery process also bring about some financial risks
Exp
for advanced economies. In advanced countries, the banking
geo
sector does not provide a sufficient amount of support to
eme
economic recovery and risks are concentrated particularly on
the non-bank financial activities. Expectations for a potential
interest rate hike by the Fed and geopolitical risks cause the
global risk appetite and capital flows to emerging economies
eco
to fluctuate.
bett
vola
Up-to-date leading indicators suggest that the Turkish
pos
economy, which slowed in the second quarter of 2014, will
show a better performance in the third quarter. However, the
mea
ongoing volatility in financial markets and vulnerabilities in
the
external demand pose downward risks to the recovery process.
rest
Macroprudential measures taken in this period of continued
fina
global uncertainties and the tight monetary policy stance
prove to be instrumental in restraining the vulnerabilities that
Chart I.1.1
Global Growth Rates and Advanced Economies'
Growth Rates1
may jeopardize economic and financial stability.
(Percent, Annual)
I.1. International Developments
Advanced Economies
Developing Economies
US- right axis
Euro area- right axis
The recovery in global economic activity is still sluggish
10
and growth dynamics differ across countries. The US economy
5
is recovering, whereas economic growth in the euro area
0
and Japan displays a considerably fragile and weak outlook
-5
(Chart I.1.1). Meanwhile, growth rate is losing pace in emerging
-10
economies. The recent downward movement in commodity
prices may affect the growth dynamics of commodity-
10
grow
8
6
4
reco
2
0
disp
-2
-4
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2008
2009
2010
2011
2012
2013
-6
Mea
2014
rece
(1) Weighted by each country's share in the global GDP.
Source: Bloomberg, CBRT
grow
exporting emerging economies negatively. The manufacturing
Financial Stability Report - November 2014
5
Financial Stability Report - November 2014
Central
CentralBank
Bankof
ofthe
theRepublic
Republicof
ofTurkey
Turkey
Central Bank of the Republic of Turkey
Central
of the Republic of Turkey
Chart Bank
I.1.2
Chart I.1.2
Manufacturing Industry PMI Indices
Manufacturing Industry PMI Indices
US
Chart I.1.2
US Area
Euro
Chart I.1.2
Euro
AreaEconomies
Manufacturing
Industry PMI
Indices
Developing
Developing
Economies
Manufacturing Industry PMI
Indices
60
60
60
60
US
Euro
US Area
Developing
Euro Area Economies
Developing Economies
55
55
5060
50
60
55
55
5060
50
60
09.14
09.14
45
45
40
40
09.14
09.14
03.14
03.14
03.14
03.14
09.13
09.13
09.13
09.13
03.13
03.13
09.12
09.12
03.12
03.12
09.11
09.11
Chart I.1.3
Chart I.1.3
03.11
03.11
40
09.10
09.10
03.10
03.10
Source: 40
Bloomberg (Latest Data: 10.14)
Source: Bloomberg (Latest Data: 10.14)
03.13
03.13
09.12
09.12
03.12
03.12
45
45
09.11
09.11
4050
40
50
03.11
03.11
4050
40
50
09.10
09.10
4555
45
55
03.10
03.10
4555
45
55
Unemployment
in Selected
Advanced
Source: Bloomberg Rates
(Latest Data:
10.14)
Unemployment Rates in Selected Advanced
Source: Bloomberg (Latest Data: 10.14)
Economies
Economies
(Percent, Annual)
(Percent, Annual)
Chart I.1.3
USin Selected Advanced
UK
Chart I.1.3
Unemployment
Rates
US
UK
Unemployment Rates in Selected Advanced
Economies
Japan
Euro Area
(Percent,
Annual)
Japan
Euro Area
Economies
(Percent, Annual)
US
UK
US
Japan
UK
Euro Area
Japan
Euro Area
01.07
01.07
06.07
06.07
11.07
11.07
04.08
04.08
09.08
09.08
02.09
02.09
07.09
07.09
12.09
12.09
05.10
05.10
10.10
10.10
03.11
03.11
08.11
08.11
01.12
01.12
06.12
06.12
11.12
11.12
04.13
04.13
09.13
09.13
02.14
02.14
07.14
07.14
14
14
12
12
10
10
8
8
14
6
6
14
12
4
4
12
10
2
2
10
8
0
0
8
6
14
14
12
12
10
10
8
814
6
612
14
4
412
10
2
210
8
0
08
6
6
4
46
4
2
24
Source: Bloomberg (Latest Data: 10.14)
Source: Bloomberg
(Latest Data: 10.14)
2
0
02
01.07
01.07
06.07
06.07
11.07
11.07
04.08
04.08
09.08
09.08
02.09
02.09
07.09
07.09
12.09
12.09
05.10
05.10
10.10
10.10
03.11
03.11
08.11
08.11
01.12
01.12
06.12
06.12
11.12
11.12
04.13
04.13
09.13
09.13
02.14
02.14
07.14
07.14
0
0
Source: Bloomberg (Latest Data: 10.14)
Source: Bloomberg (Latest Data: 10.14)
Chart
ChartI.1.4
I.1.4
S&P
GSCI
and
S&P
GSCI
andBrent
BrentOilOilPrices
Prices
(Index,
USD)
(Index,
USD)
S&P Commodity Index
Chart I.1.4
S&P Commodity Index
S&P
GSCI
and Brent Oil Prices
Chart
I.1.4
Crude Oil (Brent) Price-right axis
(Index,
USD) and
S&P GSCI
(Index, USD)
Oil (Brent) Price-right axis
Brent OilCrude
Prices
800
800
750
750
130
130
120
120
S&P Commodity Index
S&P Commodity Index
Crude Oil (Brent) Price-right axis
700
700
650
650
110
110
100
100
Crude Oil (Brent) Price-right axis
600
800
600
550
750
800
550
9090
130
8080
120
130
7070
110
120
6060
100
110
5050
90
100
10.09
10.09
02.10
02.10
06.10
06.10
10.10
10.10
02.11
02.11
06.11
06.11
10.11
10.11
02.12
02.12
06.12
06.12
10.12
10.12
02.13
02.13
06.13
06.13
10.13
10.13
02.14
02.14
06.14
06.14
10.14
10.14
500
700
750
500
450
650
700
450
400
600
650
400
economic
and
the
downward
trend
in
price
economic
activity
and low
thedue
downward
trend
in commodity
commodity
price
Inflation activity
rates
remain
to the weak
outlook
in
Inflation rates remain low due to the weak outlook in glob
The
gap
isisstill
high
inin
advanced
economies.
global
economic
activity
the
downward
in commodity
Inflation
rates
remain
low duetrend
to
the
weak Oil
outlook
glooo
Theoutput
output
gap
stilland
high
advanced
economies.
Oil prices
pricesinare
are
economic
activity
and
the indownward
trend in commodity
price
prices.
The output
still high
advanced
economies.
Oil(Chart
aa
downtrend
iningap
line
the
economic
economic
activity
and
downward
trendactivity
in commodity
pric
downtrend
lineiswith
with
theweak
weak
economic
activity
(Chart I.1.4).
I.1.4).
The are
output
gap
is still high
in advanced
economies.
Oil prices are
prices
on
a
downtrend
in
line
with
the
weak
economic
addition,
wages
not
an
pressure
The output
gap have
ishave
still high
in
advanced
economies.
Oil on
prices
are
addition,
wages
not exerted
exerted
an upward
upward
pressure
on inflation
inflatio
activity
(Chart I.1.4).
In addition,
not exerted
an (Chart I.1.4).
a downtrend
in line
with thewages
weakhave
economic
activity
especially
inin the
US.
Owing
to
developments,
inflation
a downtrend
in
line
with
the weak
economic
activity (Chart
I.1.4)
especially
the
US.
Owing
to these
these
developments,
inflation
upward
pressure
on inflation,
in the
US.upward
Owing topressure
these
addition,
wages
have especially
not exerted
an
on inflatio
advanced
economies
to
be
below
the
(Cha
addition, wages
have continues
not
exerted
upward
on inflati
advanced
economies
continues
toan
be
below pressure
the targets
targets
(Cha
developments,
inflation
in
advanced
economies
continues
to
especially in the US. Owing to these developments, inflation
I.1.5).
The deflation
threat
in the
euro
lingers. In
emergin
deflation
threat
the
euro area
area
emergin
especially
in the(Chart
US.
Owing
todeflation
these
developments,
beI.1.5).
belowThe
the targets
I.1.5).inThe
threat lingers.
in the In inflation
advanced economies continues to be below the targets (Cha
economies,
inflation
follows
aahorizontal
course.
economies,
inflation
follows
horizontal
course.
advanced
economies
continues
to inflation
be
below
the
euro
area lingers.
In emerging
economies,
follows
a targets (Ch
I.1.5). The deflation threat in the euro area lingers. In emergi
horizontal
course.
I.1.5). The
deflation threat in the euro area lingers. In emerg
economies, inflation follows a horizontal course.
economies,
inflation
follows a monetary
horizontal course.
Advanced
economies'
policies continue
to
Advanced
economies'
monetary
to spu
sp
Advanced
economies’
monetary
policiespolicies
continue continue
to
growth.
Yet,
Fed’s
and
ECB’s
policies
diverge
due
growth.
Yet,
the
Fed’sand
and
the
ECB’s
policies
diverge
due to
to th
th
spur
growth.
Yet,the
the Fed’s
thethe
ECB’s
policies
diverge
due
Advanced economies' monetary policies continue to sp
iningrowth
outlooks.
The
at
todifferences
the differences
in growth
outlooks.
TheFed
Feddecided
decided
at
its
differences
growth
outlooks.
The
Fed
decided
at its
its October
October
20s
Advanced
economies'
monetary
policies
continue
to201
growth.
Yet,
the Fed’s
and
the
ECB’s
policies
diverge due to t
October
2014
toasset
end
the
asset
purchase
program,
meeting
to
end
purchase
program,
which
itit had
meeting
tomeeting
end
the
asset
purchase
program,
which
had
bee
growth.
Yet,
thethe
Fed’s
and
the
ECB’s
policies
diverge
due bee
to
differences
in growth
outlooks.
The Fed 2014
decided
atto
its October 20
which
it hadoff
been
tapering
off since
parallel
tapering
since
January
2014 January
parallel to the
improvement
in th
50
interest
rate hikes
in theJanuary
upcoming
period.
Yet, since
inflation
tapering
off since
2014
parallel
to the
improvement in t
06.12
06.12
02.12
02.12
10.11
10.11
06.11
06.11
02.11
02.11
10.10
10.10
Chart
ChartI.1.5
I.1.5
06.10
06.10
02.10
02.10
400
10.09
10.09
450
10.14
10.14
to end
the
asset purchase
program,towhich
themeeting
improvement
in the
economy.
The Fed is expected
start it had be
02.14
02.14
06.14
06.14
60
70
50
60
10.13
10.13
450
500
02.13
02.13
06.13
06.13
80
90
70
80
10.12
10.12
550
600
500
550
Source:
Bloomberg
(Latest
Data:
14.11.14)
Source:
Bloomberg
(Latest
Data:
14.11.14)
400
Inflation
Rates
and
Source:
Bloomberg
Data: 14.11.14)
Inflation
Ratesin(Latest
inAdvanced
Advanced
andEmerging
EmergingEconomies
Economies
(Percent,
Annual)
(Percent,
Annual)
Source: Bloomberg (Latest Data: 14.11.14)
Advanced
Economies
Advanced
Economies
Chart I.1.5
USUS
Inflation
Rates in Advanced
and Emerging Economies
Chart I.1.5
Euro Area
(Percent, Annual)
Inflation Rates in
(Percent, Annual)
Euro Area
Advanced
and
Emerging
Economies
Developing
Economiesright
axis
Developing
Economiesright
axis
6 6
Advanced Economies
1212
4 4
US
Advanced Economies
Euro
US Area
88
Developing Economies- right axis
44
12
Developing
Euro Area Economies- right axis
2 2
6
0 012
8
-2 -24
2
8
-4-4
4
2
0
4
0
0
0
-4
Source: Bloomberg (Latest Data: 09.14)
Source:
CBRT,
BRSA,
TURKSTAT
(Latest
Data:
09.14)
Source:
CBRT,
BRSA,
TURKSTAT
(Latest
Data:
09.14)
Source: Bloomberg (Latest Data: 09.14)
Source: CBRT, BRSA, TURKSTAT (Latest Data: 09.14)
07.1407.14
07.1307.13
01.1401.14
07.1207.12
01.1301.13
07.1007.10
01.1101.11
07.0907.09
01.1001.10
01.0901.09
07.0807.08
01.0801.08
07.0707.07
01.0701.07
-2
07.1107.11
01.1201.12
01.07
01.07
07.07
07.07
01.08
01.08
07.08
07.08
01.09
01.09
07.09
07.09
01.10
01.10
07.10
07.10
01.11
01.11
07.11
07.11
01.12
01.12
07.12
07.12
01.13
01.13
07.13
07.13
01.14
01.14
07.14
07.14
0 06
4
-2
Source:
Bloomberg
(Latest
Data:
09.14)
Source:
Bloomberg
(Latest
Data:
09.14)
6
Türkiye Cumhuriyet Merkez
Bankası the US and th
negatively.
negatively.The
Themanufacturing
manufacturingindustry
industryPMI
PMI indices
indices in
in the US and th
euro
area
suggest
that
the
recovery
in
the
euro
area
euro area suggest that the recovery in the euro area may
may slacke
slacke
negatively. The manufacturing industry PMI indices in the US and t
and
the
US will
the
driving
force
behind
growth
in advance
negatively.
Thebe
manufacturing
industry
PMIthe
indices
in the
US and t
and
the
will
be
theUS
driving
force
the
growth
industry
PMI US
indices
in the
and the
eurobehind
area suggest
that in advance
euro area suggest that the recovery in the euro area may slack
economies
(Chart
The
same
indices
also
show
that
th
euro
areainsuggest
that
recovery
in
the
euro
may
slack
economies
(Chart
I.1.2).the
The
sameand
indices
also
show
that
th
the
recovery
the
euroI.1.2).
area
may
slacken
the US
will area
be
and the US will be the driving force behind the growth in advance
deceleration
inin
the
rate
of
emerging
economies
continu
and
theforce
US will
be growth
the
behindeconomies
the growthwill
in advanc
the
driving
behind
thedriving
growth
in
deceleration
the
growth
rateforce
ofadvanced
emerging
economies
will
continu
economies
(Chart
I.1.2).
The
same
indices
also
show
that t
(Chart
I.1.2).
The
same
indices
also
show
that
the
deceleration
inin
the
the
well.
positive
outlook
the
economies
(Chartof
Theas
indices
also
show in
thethird
thirdquarter
quarter
ofI.1.2).
theyear
year
assame
well.The
The
positive
outlook
inthat
the UtU
deceleration
in
the
growth
rate
of
emerging
economies
will
contin
inlabor
the
growth
rate
of emerging
economies
will continue
in
market
whereas
the
unemployment
rate
eur
deceleration
in
the
growth
rate
of emerging
economies
will
contin
labor
market persists,
persists,
whereas
the
unemployment
rate in
in the
the
eu
the quarter
third quarter
theasyear
well.
The positive
in the
theinthird
of the of
year
well.asThe
positive
outlook outlook
in
area
continues
to
(Chart
However,
the
downtrend
in the
third quarter
ofhigh
the year
asI.1.3).
well. The
positive
outlook
in the
area
continues
to be
be
high
(Chart
I.1.3).
However,
the
downtrend
thelabor
US labor
market
persists,whereas
whereas the
rate
market
persists,
the unemployment
unemployment
rate in the eu
labor
participation
rates
plays
an
laborforce
market
persists, whereas
unemployment
rate
inthe
thedro
e
labor
force
participation
ratesstill
stillthe
plays
animportant
importantrole
rolein
in
the
dro
in the
euro
area continues
to be(Chart
high (Chart
However,
area
continues
to be high
I.1.3).I.1.3).
However,
the downtrend
inarea
US
unemployment
rates.(Chart
Moreover,
the
fact
that
part-tim
to be high
I.1.3). However,
the
downtrend
US continues
unemployment
Moreover,
theplays
factan
that
part-tim
theindowntrend
in labor forcerates.
participation
rates still
labor force participation rates still plays an important role in the dro
employment
remains
above
the
pre-crisis
levels
indicates
the
labor force
rates
still
playsrates.
an
important
rolethat
in the
employment
remains
the
pre-crisis
levels
indicates
that
thedrU
important
role inparticipation
the
drop inabove
US unemployment
Moreover,
in US unemployment rates. Moreover, the fact that part-tim
labor
market
outlook
isisnot
robust
enough
yet.
infact
US
unemployment
rates.
Moreover,
thethefact
the
that
part-time
employment
remains
above
pre- that part-tim
labor
market
outlook
not
robust
enough
yet.
employment remains above the pre-crisis levels indicates that the
crisis
levels indicates
that the
US labor
market outlook
is not
employment
remains
above
the pre-crisis
levels indicates
that the
labor
market
outlook
is
not
robust
enough
yet.
robust
enough
yet.outlook is not robust enough yet.
labor
market
Inflation
Inflation rates
rates remain
remain low
low due
due to
to the
the weak
weak outlook
outlook in
in globa
glob
-4
tapering
off in
since
January
2014The
parallel
to the improvement
in 20
th
differences
growth
outlooks.
Fed decided
at its October
economy.
The
Fed
isis asset
expected
to
interest
rate
in
th
economy.
The
Fed
expected
to start
start
interestwhich
rate hikes
hikes
inbe
th
meeting to
end
the
purchase
program,
it had
upcoming
period.
since
inflation
remains
low
and
upcoming
period.
Yet,
since2014
inflation
remains
lowimprovement
and there
there has
hasinno
nt
tapering off
sinceYet,
January
parallel
to the
remains
low andThe
there
has is
notexpected
been a permanent
economy.
Fed
to startimprovement
interest rate hikes in t
been
a
permanent
improvement
inin the
labor
market,
intere
been
a
permanent
improvement
the
labor
market,
the
intere
economy.
The the
Fedinterest
is expected
start
rate the
hikes
in t
in the
labor market,
rate hiketo
may
startinterest
later than
upcoming period. Yet, since inflation remains low and there has n
rate
hike
may
than
expected
and
slower.
Contrary
rate
hike
may
start later
later
thaninflation
expected
and be
be
slower.
Contrary
upcoming
period.
Yet,
since
remains
low
and there
has tn
expected
and
be start
slower.
Contrary
to
the normalization
in
the
been a permanent improvement in the labor market, the intere
normalization
inin the
US
monetary
the
ECB
the
normalization
the
US
monetary
policy,
the
ECB introduced
introduced
USthe
monetary
policy, the
ECB
introduced
a policy,
negative
interest
been
a permanent
improvement
in
the
labor
market,
the inter
rate hike may start later than expected and be slower. Contrary
rate
policy
and
started
anlater
asset
purchase
program
in
October.
negative
interest
rate
policy
and
started
an
asset
program
negative
interest
rate
policy
and
started
an
asset
purchase
progra
rate
hike
may
start
than
expected
and
bepurchase
slower. Contrary
the normalization
in be
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US monetary
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However,
the ECB
may
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urged
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However,
the ECB
ECBtomay
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take
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steps
the normalization in the US monetary policy, the ECB introduced
the
inflation
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ininpolicy
the
area
does
improve.
Likewise,
the
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the euro
euro
area
does
not
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Likewise,
negative
interest
rate
and
started
annot
asset
purchase
progra
in October
2014, However,
the Bank ofthe
Japan
(BoJ)
raised
the amount
of more step
in October.
ECB
may
be urged
to take
October
2014,
the
Bank
of
Japan
(BoJ)
raised
the
amount
of
asse
October
2014,
the Bankthe
of ECB
Japan
(BoJ)
amount
ass
in October.
However,
may
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urged the
to take
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which
it
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the
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the inflation outlook in the euro area does not improve. Likewise,
purchases,
which
itit has
been
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which
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innot
the
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th
themonetary
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does
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Likewise
of the
policy
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2013.
October 2014, the Bank of Japan (BoJ) raised the amount of ass
monetary
easing
program
since
April
2013.
monetary
policythe
easing
program
since
April
2013.the
Financial
Stability
Report
- November
2014amount of as
October policy
2014,
Bank
of
Japan
(BoJ)
raised
purchases, which it has been conducting in the framework of t
purchases, which it has been conducting in the framework of t
monetary policy easing program since April 2013.
monetary policy easing program since April 2013.
negative
interest
and started
an asset
purchase progra
inflation
outlook
in therate
europolicy
area does
not improve.
Likewise,
Central Bank of the Republic of Turkey
Central Bank of the Republic of Turkey
ChartBank
I.1.6
Central
of the Republic of Turkey
US and Germany Treasury Bond Yields
Central
Bank of the Republic of Turkey
(Percent)
Chart I.1.6
US and Germany Treasury
In the coming period, macroprudential policies rather than the
11.14
07.14
09.14
11.1411.14 11.14
1600
1800
MSCI Advanced Economies- right axis
80
140
120
09.14
07.14
05.14
11.14
1500
1400
1300
1400
1300
Source: Bloomberg (Latest Data: 7.11.14)
House
Price Index in Advanced Economies*
Germany
House Price IndexUSin Advanced
Economies*
UK
House Price Index in Advanced Economies*
Chart
120I.1.8
120
House Price IndexUSin Advanced
Economies*
Germany
UK
110
US
100
120
80
80
70
60
70
60
*31.03.2007=100
Source: Bloomberg (Latest Data: 06.14)
70
60
70
60
60
60
*31.03.2007=100
Source: Bloomberg (Latest Data: 06.14)
*31.03.2007=100
Source: Bloomberg (Latest Data: 06.14)
*31.03.2007=100
Chart
Source:I.1.9
Bloomberg (Latest Data: 06.14)
Loan Growth in the USA and the Euro Area
(Annual)
Chart I.1.9
Loan Growth in the USAEuro
andArea
the Euro AreaUS
balance sheet-related problems in the aftermath of the crisis,
Chart
(Annual)I.1.9
has narrowed. Banks continue to put effort in strengthening their
(Annual)
15
10
0
15
10
5
-5
10
5
0
-10
5
0
-5
08.14
15
5
03.14
US
10.13
05.13
12.12
07.12
02.12
09.11
04.11
11.10
10
08.1408.14 08.14
Source: Fed, ECB (Latest Data: 09.14)
10.1310.13 10.13
03.1403.14 03.14
-10
Source: Fed, ECB (Latest Data: 09.14)
12.1212.12 12.12
05.1305.13 05.13
-5
-10
09.1109.11 09.11
02.1202.12 02.12
07.1207.12 07.12
0
-5
-10Fed, ECB (Latest Data: 09.14)
Source:
12.0712.07 12.07
05.0805.08 05.08
euro area banks and allow the banking sector to give more
15
US
Euro Area
15
10
0
15
10
5
-5
10
5
0
-10
5
0
-5
06.10
responsible for banking activities is believed to restore trust in
Euro Area
15
5
11.1011.10 11.10
04.1104.11 04.11
conducted before it became the single supervisory authority
(Annual)
10
05.08
structure. The comprehensive assessment study that the ECB
15
Loan Growth in the USAEuro
and
the Euro Area
Area
US
12.07
capital positions and achieving a more sound balance sheet
Loan
Growth
Chart
I.1.9 in the USA and the Euro Area
01.10
banking sector, which has faced high non-performing loans and
90
70
80
08.09
has constrained the loan demand, while the loan supply of the
60
100
90
80
90
70
80
08.0908.09 08.09
01.1001.10 01.10
06.1006.10 06.10
both demand and supply factors. The high indebtedness level
70
110
100
90
60
100
90
80
03.09
trying to avoid risks. These actions are believed to be driven by
80
120
100
110
70
110
100
90
10.08
Banks in the euro area are downsizing their balance sheets and
100
120
UK
90
120
110
Germany
80
120
100
110
10.0810.08 10.08
03.0903.09 03.09
the US, loans continue to decrease in the euro area (Chart I.1.9).
US
90
120
110
110
UK
03.07
08.07
01.08
06.08
11.08
04.09
09.09
02.10
07.10
12.10
05.11
10.11
03.12
08.12
01.13
06.13
11.13
04.14
sufficient level. While the banking sector loans are on the rise in
Germany
03.0703.07 03.07
08.0708.07 08.07
01.0801.08 01.08
06.0806.08 06.08
11.0811.08 11.08
04.0904.09 04.09
09.0909.09 09.09
02.1002.10 02.10
07.1007.10 07.10
12.1012.10 12.10
05.1105.11 05.11
10.1110.11 10.11
03.1203.12 03.12
08.1208.12 08.12
01.1301.13 01.13
06.1306.13 06.13
11.1311.13 11.13
04.1404.14 04.14
banking sector has not contributed to economic recovery at a
1300
Chart I.1.8
with risks that may originate from the low interest rate climate, if
In advanced economies, particularly in the euro area, the
1600
1500
1400
11.1411.14 11.14
Source: Bloomberg (Latest Data: 7.11.14)
09.1409.14 09.14
40
Source: Bloomberg (Latest Data: 7.11.14)
07.1407.14 07.14
60
40
01.1401.14 01.14
80
40
Source:60
Bloomberg (Latest Data: 7.11.14)
05.1405.14 05.14
01.14
11.13
09.13
1700
1300
1600
1500
100
80
60
07.13
1800
1400
1700
1600
120
40
100
80
Chart I.1.8
global growth dynamics continue to be vulnerable.
1500
1800
1700
140
60
120
100
Chart I.1.8
Financial Stability Report - November 2014
09.1409.14 09.14
1700
MOVE
MSCI
Advanced Economies- right axis
100
140
monetary policy is expected to be on the forefront of the fight
support to economic recovery (Box I.I.1).
05.14
1800
120
11.1311.13 11.13
have more apparent adverse effects on the corporate sector.
MOVE
MSCI Advanced Economies- right axis
MOVE
09.1309.13 09.13
problems likely to emerge in the non-bank financial sector may
140
MSCI and MOVE Indices in Advanced Economies
07.1307.13 07.13
plays in the funding of the corporate sector suggests that the
Chart I.1.7
05.13
Topic IV.6). The critical role that the non-bank financial sector
MSCI and MOVE Indices in Advanced Economies
03.13
on which the re-pricing will have the greatest effect (Special
bankin
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MSCI and MOVE Indices
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MSCI Advanced Economies- right axis
05.1305.13 05.13
fact shows that the non-bank financial sector will be the one
-0.5
Chart I.1.7
03.1303.13 03.13
high leverage ratios and are subject to maturity mismatch. This
-0.5
Source: Bloomberg (Latest Data: 7.11.14)
Chart I.1.7
01.13
traded funds that engage in shadow banking activities have
0.5
-0.5
0.5
MSCI and MOVE Indices in Advanced Economies
01.1301.13 01.13
banking sector’s leverage drops, hedge funds and exchange
Chart
I.1.7
Source: Bloomberg (Latest Data: 7.11.14)
07.1407.14 07.14
-0.5
05.1405.14 05.14
0.5
03.1403.14 03.14
0.5
Source:
-0.5Bloomberg (Latest Data: 7.11.14)
-0.5
concentrated especially in the non-banking sector. While the
03.14
-0.5
1.5
0.5
1.5
01.14
-0.5
1.5
0.5
1.5
Source: Bloomberg (Latest Data: 7.11.14)
In advanced economies, financial market risks are
3.5
1.5
3.5
2.5
3.5
0.5
2.5
1.5
2.5
03.14
transaction volumes and market depth decreased.
2.5
0.5
2.5
1.5
2.5
03.1403.14 03.14
volatility in financial markets has dropped to low levels, while
1.5
3.5
2.5
3.5
11.13
upward trend in housing prices continues (Chart I.1.8). The
3.5
09.13
and price to earnings ratios rise (Chart I.1.6 and I.1.7). The strong
2.5
11.1311.13 11.13
bond yields and risk premiums decline, whereas stock indices
(Percent)
07.13
for advanced economies. With the impact of these policies,
US and Germany
econo
monet
premiu
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econo
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3.5
US 2 year-right axis
Treasury Germany
Bond Yields
2 year-right axis
Germany
10 year
US
2 year-right
axis
US 10 year
Germany
2 year-right axis
Germany
10 yearaxis
US 2 year-right
US
10 year2 year-right axis
Germany
Germany 10 year
US 10 year
09.1309.13 09.13
accommodative monetary policies leads to some financial risks
(Percent)
05.13
by
07.1307.13 07.13
created
03.13
environment
05.1305.13 05.13
rate
01.13
interest
US
and
Germany Treasury Bond Yields
3.5 I.1.6
Chart
03.1303.13 03.13
low
Chart
I.1.6
(Percent)
01.1301.13 01.13
The
monet
US 2 year-right axis
Germany 2 year-right axis
Bond
Yields
Germany
10 year
US 10 year
01.1401.14 01.14
Türkiye Cumhuriyet Merkez Bankası
0
-5
-10
-5
-10
-10
7
Source: Fed, ECB (Latest Data: 09.14)
Financial Stability Report - November 2014
sufficie
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Central Bank of the Republic of Turkey
Central Bank of the Republic of Turkey
Central Bank of the Republic of Turkey
CentralChart
Bank
I.1.10of the Republic of Turkey
CDS I.1.10
Premiums of Emerging Economies
Chart
(5-Year)
Chart
CDSI.1.10
Premiums of Emerging Economies
Chart
I.1.10
CDS
Premiums of Emerging Economies
(5-Year)
of EmergingDeveloping
Economies
Economies*
300
300
250
250
200
200
150
150
100
100
50
50
0
0
300
300250
250200
200150
150100
10050
07.14
09.14
09.14
05.14
03.14
09.14
09.14
07.14
07.14
07.14
05.14
01.14
11.13
05.14
05.14
03.14
03.14
03.14
01.14
09.13
11.13
01.14
01.14
09.13
11.13
11.13
05.13
03.13
05.13
07.13
07.13
03.13
05.13
05.13
01.13
03.13
03.13
0
01.13
01.13
50
0
0
01.13
300
300250
300
300250200
250
250200150
200
200150
150 100
150100
50
100
100
50 50 0
07.13
Developing
Selected Economies*
Developing Economies**
Developing Economies*
Developing
Economies*
Selected
Developing Economies**
Selected Developing Economies**
Selected Developing Economies**
07.13
09.13
09.13
(5-Year)
CDS
Premiums
(5-Year)
50 0
0
*Emerging economies include Brazil, the Czech Republic, Indonesia, South
Africa, Colombia, Hungary, Mexico, Poland, Romania, Turkey and Chile.
*Emerging
economies
include
Brazil,Brazil,
the Czech
Republic,
Indonesia,
South South
*Emerging
economies
theand
Czech
Republic,
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** CDS premiums
of include
Brazil, Indonesia
South
Africa have
been used in the
Africa,
Colombia,
Hungary,
Mexico,
Poland,
Romania,
Turkey
and Chile.
Africa,
Colombia,
Hungary,
Mexico,
Poland,
Romania,
Turkey
and
Chile.
*Emerging
economies
include
Brazil,
the premium
Czech
Republic,
Indonesia,
South
calculation
of the
average
CDS
of selected
emerging
market
**
CDS
premiums
of
Brazil,
Indonesia
and South
AfricaAfrica
have
been
inused
the in the
Africa,
Colombia,
Hungary,
Mexico,
Poland,
Turkey
andused
Chile.
** CDS
premiums
of Brazil,
Indonesia
andRomania,
South
have
been
economies.
calculation
of the
average
CDS CDS
premium
of selected
emerging
** CDS
premiums
Brazil,
Indonesia
and
South
Africa
have
beenmarket
usedmarket
in the
calculation
ofof
the
average
premium
of
selected
emerging
Source:
Bloomberg
(Latest
Data:
7.10.14)
economies.
calculation
of the average CDS premium of selected emerging market
economies.
Source:
Bloomberg
(Latest Data: 7.10.14)
economies.
Source:
Bloomberg
Chart
I.1.11(Latest Data: 7.10.14)
Source: Bloomberg (Latest Data: 7.10.14)
Chart
I.1.11
Exchange
Chart
I.1.11 Rate* Index and MSCI Emerging Markets Index
Chart I.1.11
Exchange
Rate*
Index
andand
MSCI
Emerging
Markets
IndexIndex
Exchange
Rate*
Index
MSCI
Emerging
Markets
Exchange Rate* Index and MSCI Emerging Markets Index
Exchange Rate Index
Exchange Rate Index
Exchange
Rate
Index
Exchange
RateEmerging
Index
MSCI
Economies-right axis
MSCI Emerging Economies-right axis
Emerging
Economies-right
MSCIMSCI
Emerging
Economies-right
axis axis
01.13
03.13
03.13
01.13
03.13
05.13
05.13
03.13
05.13
07.13
07.13
05.13
07.13
09.13
09.13
07.13
09.13
11.13
11.13
09.13
01.14
01.14
11.13
11.13
03.14
03.14
01.14
01.13
01.13
1100
1100
1050
1050
1000
1000
950
950
900
900
850
850
01.14
05.14
05.14
03.14
03.14
07.14
07.14
05.14
05.14
09.14
09.14
07.14
07.14
09.14
09.14
104
104
104104
100
100
100100
96
96
96 96
92
92
92 92
88
88
88 88
84
84
84 84
1100
1100
1050
1050
1000
1000
950
950
900
900
850
850
*The Exchange
Rate Index
compiled
by takingby
the
arithmetic
mean of the
*The Exchange
Rateis Index
is compiled
taking
the arithmetic
mean of the
US
dollar
equivalent
of
localisof
currencies
of Argentina,
Brazil, Colombia,
the
*The
Exchange
Index
compiled
by
takingof
the
arithmetic
meanColombia,
of
the
USExchange
dollar Rate
equivalent
local
currencies
Argentina,
Brazil,
the
*TheRepublic,
Rate Index
isIndonesia,
compiled Korea,
by taking
the arithmetic
of the
Czech
Hungary,
India,
Malaysia,
Peru, the mean
US dollar
equivalent
of local
currencies
ofIndonesia,
Argentina,
Brazil, Colombia,
the
Czech
Republic,
Hungary,
India,
Korea,
Malaysia,
Peru, the
US dollar
equivalent
ofIndia,
local Indonesia,
currencies
of Argentina,
Brazil,
Colombia,
the
Philippines,
Poland,
Russia,
South
Africa,
Thailand
and
Turkey.
(01.01.2013=100)
Czech
Republic,
Hungary,
Korea,
Malaysia,
Peru,
the (01.01.2013=100)
Philippines,
Poland,
Russia,
South
Africa,
Thailand
and
Turkey.
Czech
Republic,
Hungary,
India,
Indonesia,
Korea,
Malaysia,
Peru, the
Source:
CBRT
Calculations,
Bloomberg
(Latest
Data:
30.10.14)
Philippines,
Poland,
Russia,
South
Africa,
Thailand
and
Turkey.
(01.01.2013=100)
Source: CBRT
Calculations,
Bloomberg
(Latest Data:
30.10.14)
Philippines,
Poland,
Russia,
South
Africa,
and Turkey.
(01.01.2013=100)
Source:
CBRT Calculations,
Bloomberg
(LatestThailand
Data: 30.10.14)
Source: CBRT Calculations, Bloomberg (Latest Data: 30.10.14)
Chart I.1.12
Chart
I.1.12
Chart
I.1.12
Weekly
Portfolio Flows to Emerging Countries
Chart
I.1.12
Weekly
Portfolio
to Emerging
Countries
(Billion
USD)
Weekly
Portfolio
Flows Flows
to Emerging
Countries
(Billion
Weekly
Portfolio Flows to Emerging Countries
(Billion
USD) USD)
-15
-15
Source: EPFR (Latest Data: 29.10.14)
Source: EPFR (Latest Data: 29.10.14)
Monetary
policy
preferences
of of
advanced
economies
Monetary
policy
preferences
of advanced
economies
will
Monetary
policy
preferences
advanced
economies
will
Monetary
policy
preferences
of advanced
economies
will
Monetary
policy
preferences
of advanced
economies
will
continue
to affect
Turkey
in theTurkey
upcoming
period.
If the deceleration
will
continue
to affect
in the
upcoming
If
continue
to affect
Turkey
in
the upcoming
period.
Ifperiod.
the deceleration
continue
to affect
Turkey
in the
period.
If the If
deceleration
continue
to affect
Turkey
inupcoming
the upcoming
period.
the deceleration
in global
growth
leads leads
to
delay
in the normalization
advanced
the
deceleration
in a
global
to a of
delay
inof the
in global
growth
to a growth
delay
inleads
the normalization
advanced
in global
growth
leads
to a to
delay
in theinnormalization
of advanced
in global
growth
leads
a delay
the normalization
of advanced
economies'
monetary
policies,
then
there
may
be
a
risk
of
normalization
of
advanced
economies’
monetary
policies,
economies'
monetary
policies,
then there
may
a risk of
economies'
monetary
policies,
then there
may be
a be
risk of
economies' monetary policies, then there may be a risk of
overborrowing.
Inmay
suchbe
a case,
measures
to increaseInthe
resilience
of
then
there
a
risk
of
overborrowing.
such
a
case,
overborrowing.
In asuch
a measures
case, measures
to increase
the resilience
of
overborrowing.
In such
case,
to increase
the resilience
of
overborrowing. In such a case, measures to increase the resilience of
the financial
system
and
encourage
prudent
borrowing
will
be
of
measures
to increase
the
of the
financial
system
and
the financial
system
and encourage
prudent
borrowing
will be
of
the financial
system
andresilience
encourage
prudent
borrowing
will be of
the importance.
financial system and encourage prudent borrowing will be of
critical
encourage
prudent
borrowing
will
be
of
critical
importance.
critical
importance.
critical
importance.
critical importance.
07.14
09.14
09.14
Debt Instruments Funds
Equity Funds
Debt Instruments
Equity Funds
Debt Instruments
Funds Funds
Equity Funds
Debt Instruments Funds
Equity Funds
03.12
01.1203.12
01.12
05.12
05.12
03.12
07.12
07.12
03.12
05.12
01.12
01.12
15
15
15
10 15
10
10
5
10
5
5
0
5
0
0
-5
0
-5
-5
-10
-10 -5
-15 -10
-15 -10
09.12
09.12
05.12
07.12
11.12
11.12
07.12
09.12
01.13
01.13
09.12
11.12
03.13
03.13
11.12
01.13
05.13
01.1305.13
03.13
07.13
07.13
03.13
05.13
09.13
09.13
05.13
07.13
11.13
11.13
07.13
09.13
01.14
01.14
09.13
11.13
03.14
03.14
11.13
01.14
05.14
05.14
01.14
03.14
07.14
07.14
03.14
05.14
09.14
09.14
05.14
07.14
(Billion USD)
The
appetite
and and
capital
flows to
emerging
The global
globalriskrisk
appetite
capital
flows
to emerging
The global risk appetite and capital flows to emerging
The globalfollow
risk appetite
andcourse
capital
flows
to
emerging
economies
a fluctuating
fluctuating
due
uncertainties
economies
due
to to
uncertainties
regarding
The global risk a
appetite
and course
capital
flows
to
emerging
economies
follow
a
fluctuating
course
due
to
uncertainties
regarding
economies
follow
a Fed’s
fluctuating
course
due
to
uncertainties
regarding
regarding
the
interest
rateand
hikes
and
geopolitical
risks.
the Fed’s
interest
rate
hikes
geopolitical
risks.
Accordingly,
economies
follow
a fluctuating
course
due
to
uncertainties
regarding
the
Fed’s
interest
rate
hikes
and
geopolitical
risks.
Accordingly,
the Accordingly,
Fed’s interest exchange
rate hikes rate,
and geopolitical
risks.
Accordingly,
interest
rate,
stock
exchange
exchange
rate,
rate,geopolitical
stock exchange
and risk premium
the Fed’s
interest
rateinterest
hikes and
risks. Accordingly,
exchange
rate,
interest
rate,
stock
exchange
andpremium
risk premium
exchange
rate,
interest
rate,
stock
exchange
and
risk
and
riskrate,
premium
areinexchange
also
fluctuating
in emerging
indicators
are
alsoindicators
fluctuating
emerging
economies
(Chart I.1.10
exchange
interest
rate, stock
and
risk
premium
indicators
are
also
fluctuating
in emerging
economies
(Chart
I.1.10
indicators
are
also
fluctuating
in
emerging
economies
(Chart
I.1.10
economies
(Chart
I.1.10 and
Chart I.1.11).
While
ahike
probable
indicators
are also
fluctuating
in probable
emerging
economies
I.1.10
and Chart
I.1.11).
While
a
interest
rate(Chart
by
the Fed in
Chart
I.1.11).
While
a probable
interest
rate by
hike
theinFed in
andand
Chart
I.1.11).
While
probable
interest
rate
hike
thebyFed
rateincrease
hike
bya
the
Fed in 2015
may
increase
and interest
Chartmay
I.1.11).
While
adownward
probable
interest
rate
hikemovements,
bydownward
the Fed monetary
in
2015
risks to
capital
2015
may
increase
downward
risks
to capital
movements,
monetary
2015
may
increase
downward
risks
to
capital
movements,
monetary
risks
to
capital
movements,
monetary
easing
policies
of
the
ECB
2015 easing
may increase
risksand
to capital
movements,
policiesdownward
of the ECB
the BoJ
will offsetmonetary
these risks to a
easing
policies
of the
ECB ECB
and and
the BoJ
will
offset
these these
risks torisks
a to a
easing
policies
of
the
the
BoJ
will
offset
and
the BoJ
willthe
offset
these
risks
a certain
extent
(Chart
easing
policies
of
ECB
and
theto
BoJ
will offset
these
risksI.1.12).
to of
a capital
certain
extent
(Chart
I.1.12).
Nevertheless,
susceptibility
certain
extent
(Chart
I.1.12).
Nevertheless,
susceptibility
of capital
certain
extent
(Chart
I.1.12).
Nevertheless,
susceptibility
of
capital
Nevertheless,
susceptibility
of capital movements
to countrycertain
extent (Chart
I.1.12). Nevertheless,
movements
to country-specific
factorssusceptibility
is expected of
to capital
increase in the
movements
to country-specific
factors
is expected
to increase
in the in the
movements
to country-specific
factors
is expected
to increase
movements
country-specific
factors
is expected
in the
specific tofactors
is expected
to
increase
in to
theincrease
forthcoming
forthcoming period, with a likely fall in the risk appetite of
forthcoming
period,
with
a
likely
fall
in
the
risk
appetite
of
forthcoming
period,
with
athelikely
fallthe
in risk
the
risk appetite
of
forthcoming
period,
withfall
a inlikely
fall appetite
in
appetite
of
period, with
a likely
risk
of international
international
investors.
The
level
of
emerging
market
economies'
international
investors.
The
level
of
emerging
market
economies'
international
The
of emerging
market
economies'
international
levellevel
of emerging
market
economies'
investors. investors.
Theinvestors.
level The
of emerging
market
economies’
resilience
resilience
to financial
shocks
will
be decisive
for countries
that will
resilience
to
financial
shocks
will
be
decisive
for
countries
that
will
resilience
to shocks
financial
willdecisive
be
decisive
for
that will
resilience
to financial
shocks
be
for countries
will
to financial
will shocks
be will
decisive
for countries
thatcountries
will that
receive
receive
global
capital
In this respect,
outlooks,
receive
global
capital
flows. flows.
In this respect,
growth growth
outlooks,
inflation inflation
receive
global
capital
flows.
Inrespect,
this respect,
growth
outlooks,
inflation
receive
global
capital
flows.
In
growth
outlooks,
inflation
global
capital
flows.
In
thisthis
respect,
growth
outlooks,
inflation
and external
vulnerabilities
of emerging
economies
will
ratesrates
and external
vulnerabilities
of emerging
market market
economies
will
rates
andand
external
vulnerabilities
of emerging
market
economies
will
rates
external
vulnerabilities
ofemerging
emerging
market
economies
will
rates
and
external
vulnerabilities
of
market
economies
probably
capital
flows I.1.1).
(Table I.1.1).
probably
affectaffect
globalglobal
capital
flows (Table
probably
affect
global
capital
flows
(Table
I.1.1).
probably
affect
global
capital
flows
(Table
I.1.1).
will probably
affect
global
capital
flows
(Table
I.1.1).
Source: EPFR (Latest Data: 29.10.14)
Table
Source: EPFR (Latest Data: 29.10.14)
I.1.1
Table I.1.1
Selected Indicators in Emerging Economies*
Table I.1.1
Selected Indicators in Emerging Economies*
Table I.1.1
Brazil
Hungary
India
Indonesia
Mexico
Poland Russia
S. Africa
Turkey
Selected Indicators in Emerging Economies*
Brazil
Hungary
India
Indonesia
Mexico
Poland Russia
S. Africa
Turkey
1
Selected
Indicators in Emerging Economies*
Growth
0,3
2,8
5,6
5,2
2,4
3,2
0,2
1,4
3,3
Brazil 1,8
Hungary
India
Indonesia
Mexico
Poland
Russia
S. 8,9
Africa
Turkey
Growth11
0,3
2,8
5,6
2,4
3,2
0,2
1,4
3,3
Inflation
6,2
7,6
5,2
4,0
0,0
8,3
6,3
Brazil
Hungary
India
Indonesia
Mexico
Poland
Russia
S.
Africa
Turkey
1
1
Inflation
6,2
1,8
7,6
5,2
4,0
0,0
8,33,2
6,3
8,9
GrowthBalance
0,3 -2,9
2,8 -7,2
5,6-2,5
5,2
2,4
0,2
1,4
3,3
Fiscal
Budget
/ GDP1
-3,9
-4,2
-3,2
-0,9
-4,9
-1,4
1
1
1
1
Growth
0,3
2,8
5,6
5,2
2,4
3,2
0,2
1,4
3,3
Fiscal
Budget
Balance
/
GDP
-3,9
-2,9
-7,2
-2,5
-4,2
-3,2
-0,9
-4,9
-1,4
Current
Account Balance / GDP
-3,5
-1,9
-1,5
2,70,0
-5,7
-5,7
Inflation
6,2 2,5
1,8 -2,1
7,6-3,2
5,2
4,0
8,3
6,3
8,9
1
1 / GDP1
Inflation
1,8-2,960,5
7,6-7,226,2
5,2-2,5
4,0
0,0
8,3
6,3
8,9-1,4
Current
Account
-3,5 6,2-3,9 79,1
2,5
-2,1
-3,2
-1,9
-1,5
2,7
-5,7
-5,7
Government
DebtBalance
/ GDP
48,0
49,4
15,7
47,9
33,1
Fiscal
Budget
Balance
/ GDP1 65,8
-4,2
-3,2
-0,9
-4,9
1
Government
Debt
/2,5GDPBalance
26,2
48,0
49,4
15,7
47,9
33,1
Fiscal
Budget
Balance
/ GDP/1 GDP165,8
-7,2-2,111,0
-2,5-3,2
-4,2
-3,2
-0,9
-4,9
-1,4-5,7
Real
Credit
Growth
6,4 -3,9
-6,0 -2,92,5 60,5
5,0
5,3
4,2
10,6
1,9
10,1
Current
Account
-3,5 79,1
-1,9
-1,5
2,7
-5,7
2,53
1
Real
Credit
Growth
6,4 -3,5
-6,0
5,0
11,0
5,3
4,2
10,6
1,9
10,1
Current
Account
Balance
2,579,122,0
-2,1
-3,226,2
-1,9
-1,5
2,7
-5,7
-5,733,1
External
Loans
/ GDP
33,3
34,2
70,5
35,5
41,6
49,4
Government
Debt
/ GDP/ 1GDP 23,5
65,8 155,2
60,5
48,0
49,4
15,7
47,9
3
External
Loans
/ GDP
23,5 65,86,4 155,2 79,1
34,2
70,5
35,5
41,6
49,4
Short-Term
External
Debt
Government
Debt
/ /GDP
60,55,033,3
26,2
48,0
49,4
15,7
47,9
33,110,1
2,5 1
Real
Credit
Growth
-6,022,0
11,0
5,3
4,2
10,6
1,9
11,3
54,5
27,8
44,7
53,4
45,6
19,0
75,4
98,6
3
Short-Term
External
Debt2,5/ 3
Reserves
Real
Credit
Growth
5,022,0
11,0
5,3
4,2
1,9
10,149,4
External
Loans
/ GDP
155,2
33,3
34,2
70,5 10,6
35,5
41,6
11,3 6,423,5 54,5 -6,0
27,8
44,7
53,4
45,6
19,0
75,4
98,6
3
4
3
Reserves
Household
Debt
/External
GDP
28,1 155,2 8,1
34,6
81,2
37,9
19,2
External
Loans
/ GDP
23,5
22,0 16,3
33,3 14,2
34,2
70,5
35,5
41,6
49,4
Short-Term
Debt /
Household
Debt
/ GDP4 Debt
16,3
14,2
34,6
81,2
37,9
19,2
11,3 28,1
54,5 8,1
27,8
44,7
53,4
45,6
19,0
75,4
98,6
Non-financial
Corporations
Debt
/
Short-Term
External
/
3
Reserves
87,5 54,5 45,9 27,8 20,3
41,8
31,0
31,7
45,1
11,3
44,7 11,4
53,4
45,6
19,0
75,4
98,6
4
Non-financial
3 Corporations Debt /
GDP
Reserves
4
87,5
45,9
20,3
11,4
41,8
31,0
31,7
45,1
28,1
8,1
16,3
14,2
34,6
81,2
37,9
19,2
4 Household Debt /5 GDP
GDPHousehold
Capital
Adequacy
Ratio
15,5
16,6
12,6
18,9
15,9
15,7
12,8
14,6
15,9
4
Debt Corporations
/ GDP
28,1
8,1
16,3
14,2
34,6
81,2
37,9
19,2
Non-financial
Debt /
5
Capital
Adequacy
Ratio5
16,6
18,9
15,9
15,7
12,8
14,6
15,9
Equity/Asset
9,3
7,0
12,7
10,3
9,1
11,1
7,7
11,4
- 10,7
87,512,6
45,9
20,3
11,4
41,8
31,0
31,7
45,1
Non-financial
Corporations
Debt / 15,5
4
GDP
5
5
87,5
45,9
20,3
11,4
41,8
31,0
31,7
45,1
Equity/Asset
9,3
10,7
7,0
12,7
10,3
9,1
11,1
7,7
11,4
NPL GDP
Ratio4
2,9
16,3
4,0
2,1
3,2
5,0
6,5
3,4
2,9
5
Capital
15,5 110,0
16,689,5
12,6
18,9
15,9
15,7
12,8
14,6
15,9
5
5 Adequacy Ratio
NPL Ratio
2,9
16,3
4,0
2,1
3,2
5,0
6,5
3,4
2,9
Loan/Deposit
85,0
100,2
111,1
115,7
152,9
187,6
119,9
Capital
Adequacy
Ratio5
15,59,3
16,6
12,6
18,9
15,9
15,79,1
12,811,1
14,67,7
15,911,4
5
Equity/Asset
10,7
12,7
10,3
Loan/Deposit
85,0forecast,
110,0
89,5 bulletin.7,0
100,2
111,1
115,7
152,9
187,6
119,9
*Data
for
Turkey 5is based
on CBRT's year-end inflation
MTP
and BRSA's
monthly
5
Equity/Asset
9,32,9MTP and BRSA's
10,7
7,0
12,72,1
10,33,2
9,1 5,0
11,16,5
7,7 3,4
11,42,9
5 year-end forecasts.
1 Refers
NPL
Ratio
16,3
toTurkey
IMF's
2014
*Data
for
is based
on CBRT's year-end inflation forecast,
monthly bulletin.4,0
5
2
NPL
16,3
2,1
3,2
5,0
3,4187,6
2,9119,9
1 Calculated
5 2014-Q1
based
BIS
loan growth data and2,9
IMF's
year-end inflation
forecasts.4,089,5
Refers
to Ratio
IMF's
2014on
year-end
forecasts.
Loan/Deposit
85,0
110,0
100,2
111,1
115,7 6,5152,9
3
5
2 External
debt data on
include
IMF's 2014-Q2
data.data
Original
maturities
were used
in the
calculation of short-term
external debt.
Calculated
loan growth
and
IMF's year-end
forecasts.
Loan/Deposit
85,0
110,0
100,2
111,1
115,7
152,9
187,6
119,9
*Databased
for TurkeyBIS
is 2014-Q1
based on
CBRT's year-end
inflation
forecast,inflation
MTP and
BRSA's89,5
monthly bulletin.
4
3 Calculated
bydata
dividing
BIS 2014-Q1
indebtedness
data into
IMF's 2014
year-end
GDP
estimations.
External debt
include
IMF's 2014-Q2
data. Original
maturities
were
used in the
calculation
of
short-term external debt.
*Data
for Turkey
is 2014
based
on CBRT's
year-end inflation forecast, MTP and BRSA's monthly bulletin.
1 Refers
to IMF's
year-end
forecasts.
are as of 2013 year-end. Data for Turkey reflect 2013-Q3(end of
Calculated based on BIS 2014-Q1 loan growth data and IMF's year-end inflation forecasts.
are as of 2013 year-end. Data for Turkey reflect 2013-Q3(end of
External
debt data include IMF's 2014-Q2 data. Original maturities were used in the calculation of short-term external debt.
quarter)
data.
3 External
Source:
Local
Data,
debt
data
includeBIS
IMF's
2014-Q2
data. Original
maturities
were
in the GDP
calculation
of short-term external debt.
4BIS,
Calculated
by IMF
dividing
2014-Q1
indebtedness
data
into IMF's
2014used
year-end
estimations.
4 Calculated
Source:
Local
Data,
IMF
by
dividing
BIS
2014-Q1
indebtedness
data
into
IMF's
2014
year-end
GDP
estimations.
5BIS,
Refers to banking data pertaining to 2014-Q2. All data for Poland and loan/deposit ratio data for Hungary are as of 2013 year-end. Data for Turkey reflect 2013-Q3(end of
5 Refers to banking data pertaining to 2014-Q2. All data for Poland and loan/deposit ratio data for Hungary are as of 2013 year-end. Data for Turkey reflect 2013-Q3(end of
quarter) data.
quarter) data.
Source: BIS, Local Data, IMF
Source: BIS, Local Data, IMF
5
4 Refers
to banking
data
pertaining
2014-Q2. All data
andyear-end
loan/deposit
data for Hungary
Calculated
byIMF's
dividing
BIS
2014-Q1toforecasts.
indebtedness
datafor
intoPoland
IMF's 2014
GDPratio
estimations.
1 Refers
to
2014
year-end
2
5
quarter)
data.
Refers
to
bankingbased
data pertaining
to 2014-Q2.
All datadata
for Poland
andyear-end
loan/deposit
ratio data
for Hungary
2 Calculated
on BIS 2014-Q1
loan growth
and IMF's
inflation
forecasts.
3
8
Financial Stability Report - November 2014
Financial Stability Report - November 2014
FinancialStability
StabilityReport
Report- November
- November2014
2014
Financial
Financial Stability Report - November 2014
8
8
88
Central Bank
of Cumhuriyet
the RepublicMerkez
of Turkey
Türkiye
Bankası
Box
Measures Taken to Support Economic Activity and Struggle with Deflation in the Euro Area
I.1.1
A series of measures have been taken in the euro area to support economic activity and
stimulate banks' credit intermediation functions. The most significant measures recently taken in the
euro area have been to cut ECB lending rates close to 0 percent, drive the borrowing rate down to
negative, start an asset purchase program, initiate longer-term refinancing operations and conduct
comprehensive assessment studies on banks.
At its monetary policy meeting in June, the ECB decided on a negative deposit facility rate for
the first time and set the interest rate applied to deposits in excess of the minimum reserve requirements
that the banks hold with the ECB at -0.10 percent. At its September meeting, the ECB further cut the
marginal lending facility, main refinancing operations and deposit facility rates to 0.3 percent, 0.05
percent and -0.2 percent, respectively (Chart I.1.1.1). On the other hand, an analysis of the borrowing
amounts in the ECB balance sheet reveals that the amount of excess reserves, which was
approximately EUR 88 billion prior to the negative deposit facility rate, has not registered a significant
change despite the recent decisions. In this respect, the negative deposit facility rate is believed to
have fallen short of leading to the expected impact.
Chart I.1.1.1
Chart I.1.1.2
Changes in ECB Policy Rates
Changes in the ECB's Balance Sheet Size
(Percent)
(Billion Euro)
Main refinancing operations
3500
Marginal lending facility
3000
Deposit facility
6
2500
5
4
2000
3
1500
2
1000
1
Source: Bloomberg
07.14
02.14
09.13
04.13
11.12
06.12
01.12
08.11
03.11
10.10
05.10
12.09
07.09
02.09
09.08
04.08
11.07
06.07
0
01.07
-1
01.07
06.07
11.07
04.08
09.08
02.09
07.09
12.09
05.10
10.10
03.11
08.11
01.12
06.12
11.12
04.13
09.13
02.14
07.14
500
0
Source: ECB
In October, the ECB announced that it would launch asset purchase programs that will last for
at least 2 years. In this framework, the ECB started the covered bond purchase program in October
and asset-backed securities purchase program in November. The ECB bought EUR 4.8 billion worth of
covered bonds in October. Considering that the current qualified covered bond amount in the market
is EUR 140 billion and the amount of asset-backed securities is limited, asset purchase programs may
not have a big impact on the ECB's balance sheet. Recently, there have been some debates
suggesting that the ECB should buy government securities to expand its balance sheet.
Financial
Stability
Report-- November
November 20142014
Financial
Stability
Report
9
9
Türkiye Cumhuriyet Merkez Bankası
Central Bank of the Republic of Turkey
The ECB introduced targeted longer-term refinancing operations (TLTROs) in June 2014. It will
hold a longer-term refinancing auction every 3 months between September 2014 and June 2016, and
all TLTROs will mature in September 2018. The Bank plans to hold a total of 8 refinancing auctions.
Financial institutions will initially be able to borrow an amount equal to 7 percent of the total amount of
their loans to households and the corporate sector (excluding loans to households for house purchase),
outstanding on 30 April 2014. Borrowing limits in September and December 2014 will be calculated on
the basis of this amount and an institutiton's refinancing amount will not exceed this initial allowance.
The refinancing amount in other issues will be limited to three times the additional lending of financial
institutions to households and the corporate sector (excluding loans to households for house purchase)
as per 30 April 2014. The interest rate on the TLTROs will be fixed over the life of each operation at the
rate on the Eurosystem’s main refinancing operations prevailing at the time of take-up, plus a fixed
spread of 10 basis points. The TLTROs are expected to contribute to economic activity by supporting
bank lending to households and the corporate sector. As of April 2014, the net lending of euro area
banks to households and the corporate sector (excluding loans to households for house purchase)
amounts to approximately EUR 5.7 trillion. Accordingly, the maximum amount of funding that banks
can get from the TLTROs is EUR 400 billion. The refinancing amount of EUR 82.6 billion provided to 738
financial institutions through the TLTRO in September 2014 is considerably below the maximum amount
of refinancing that banks can get. These institutions will be able to use their remaining limits in the
December 2014 auction. On the other hand, even though the ECB's monetary policy decisions are
expected to affect capital flows to emerging economies, statistical studies suggest that ECB
implementations will not be as effective as the monetary policy decisions of the Fed (IIF,2014). All in all,
the fact that banks have not made a serious change in the amount of excess reserves they hold with
the ECB after the negative deposit facility rate decision and the TLTRO facilities have not been used
intensely shows that credit supply and demand are still low in the euro area.
A comprehensive assessment study has been conducted on banks in the euro area. The study
focuses on revealing whether the current financial conditions of banks are presented accurately,
identifying problems, developing remedial action plans and assuring that banks have a healthy and
reliable structure. Total assets of 130 banks covered in the assessment make up 82 percent of the euro
area's total bank assets. The study is based on 2013 year-end data. The comprehensive assessment
consists of two main components: the asset quality review and the stress test of the banks. According
to the results of the comprehensive assessment released in October, a capital shortfall of EUR 25 billion
was detected at 25 banks which failed the asset quality review and the stress test. On the other hand,
an analysis of October 2014 data shows that some of the banks have already covered their capital
shortfall and the remaining capital shortfall has declined to approximately EUR 9.5 billion. Banks with
shortfalls must prepare capital plans in November.
10
Financial Stability Report - November 2014
Financial Stability Report - November 2014
10
23
23
27
21
27
21
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 21
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 25
2008
2009
2010
2011
2012
2013 2014
2008
2009
2010
2011
2012
2013 2014
21
25
23
2008
Financial Stability Report - November 2014
Millions
Millions
Millions
ImportImport
Import
Ağu.14
Ağu.14
Ağu.14
08.14
Nis.14
Nis.14
Nis.14
04.14
Ara.13
Ara.13
Ara.13
12.13
Şub.14
Şub.14
Şub.14
02.14
Eki.13
Eki.13
Eki.13
10.13
Ağu.13
Ağu.13
Ağu.13
08.13
Haz.14
Haz.14
Haz.14
06.14
2014
30
25
Other Investments
Portfolio
Investments
Portfolio
Investments
Current Account
Deficit
dis
20
Current Account Deficit
inc
dis
15
dis
10
qu
inc
09.14
05.14
05.14
05.14
Dec
09.14
09.14
09.13
01.14
01.14
01.14
Nov
Oct
09.13
09.13
05.13
01.13
09.12
05.12
5
09.12
09.12
Aug
01.13
01.13
Sept
05.13
05.13
the risk premiums of peer emerging economies. CDS premiums
25
July
05.12
05.12
Turkey’s risk premium since the third quarter, similar to those in
80
100
60
100 20
80
40
80
60 15
20
60
0
40
40 10
-20
20
20
-40
0 5
0
-20
-20 0
-40
-40
01.10
of global recovery, there have been acute fluctuations in
2012
Current
Account Deficit
Direct Investments
Investment
Other
100
01.10
01.10
Mar
05.10
05.10
April
09.10
09.10
intensifying around Turkey and concerns about the vulnerability
im
im
im
ac
ac
ac
me
me
lon
lon
lon
ge
ge
ge
do
do
do
ex
ex
ex
ba
ba
ba
51
51
51
50
51
50
50
49
50
49
49
48
49
48
48
47
48
47
47
46
47
46
46
45
46
45
45
45
(Billion USD)
Current
Account Deficit and Financing Items¹
Direct Investment
Current
Account
Deficit
and USD)
Financing2013
Items¹
(12-Month
Cumulative
Billion
2011
Other
Investments
30
(12-Month
Cumulative
Billion
USD)
Portfolio
Investments
Direct Investment
09.09
uncertainties in global monetary policies, the geopolitical risks
-0.4
Chart I.2.4
Chart Account
I.2.5
Current
Deficit and Financing Items¹
Chart
I.2.4
Cumulative
Portfolio Flows1
(12-Month
Chart
I.2.4 Cumulative Billion USD)
09.09
09.09
Feb
and Turkey-specific risk perceptions. However, driven by the
-0.2
Source: TURKSTAT
Source: TURKSTAT
05.09
quarter of the year owing to the improvement in both global
Nis.13
Nis.13
Nis.13
04.13
14
14
14
12
14
12
12
10
12
10
10
108
8
86
6
6
4
6
4
4
2
4
2
2
0
20
0
0
01.09
increasing volatility. Turkey’s risk premium plunged in the second
-0.4
Labor
Force Participation
Rate (RA)
Unemployment
Rate
Labor
Force
Rate
Labor
Force Participation
Participation
Rate (RA)
(RA)
Unemployment
Rate
Non-farm Unemployment
Rate
Unemployment
Rate
Unemployment
Rate
Non-farm Unemployment
Rate
Non-farm Unemployment Rate
Non-farm Unemployment Rate
01.09
01.09
Jan
05.09
05.09
displayed a weak and fluctuating outlook due to the globally
-0.2
Chart I.2.3
Chart
I.2.3
Unemployment
and Labor Force Participation
Chart
I.2.3
Unemployment
and Labor Force Participation
Chart
Rates I.2.3
Unemployment
and
Force
Rates
Unemployment
and Labor
Labor
Force Participation
Participation
(Seasonally adjusted,
Percent)
Rates
Rates
(Seasonally adjusted, Percent)
Labor Force Participation Rate (RA)
(Seasonally adjusted,
Percent)
Source:
Source: TURKSTAT
TURKSTAT
In the second half of the year, capital flows to Turkey
-0.1
un
un
9.6
un
9.6
pre
9.6
pre
pre
at
at
at
the
the
the
rel
rel
rel
-0.4
-0.4
Export
ExportExport
-0.3
-0.2
-0.2
-0.4
-0.4
Haz.13
Haz.13
Haz.13
06.13
imports (Chart I.2.4).
-0.3
-0.3
-0.2
-0.2
01.12
second half of the year on the back of the moderate rise in
1.0
-0.1
-0.1
09.11
of net exports to growth is expected to wane relatively in the
po
Source: CBRT, TURKSTAT
Nis.12
Nis.12
Nis.12
04.12
as the signs of a revival in domestic demand, the contribution
21
2014
1.0
Source: CBRT, TURKSTAT
Source: CBRT, TURKSTAT
Şub.12
Şub.12
Şub.12
02.12
fall in global demand and geopolitical developments as well
2013
Inventories
Inventories
Inventories
-1.5
rate maintains its relatively high level of recent years.
the weakening in the long-lasting uptrend in exports due to the
2012
Public
Investment
Public
Public
Investment
Investment
-1.0
(Chart I.2.3). On the other hand, the labor force participation
macroprudential measures. Meanwhile, taking into account
2011
Public
Consumption
Public
Public
Consumption
Consumption
2.5
1.0
1.0
2.0
0.5
0.5
1.5
0.0
1.0
0.0
-0.5
0.5
-0.5
-1.0
0.0
-1.0
-1.5
-0.5
-1.5
they stood at 10.4 percent and 12.4 percent as of August 2014
of loan growth achieved with the tight monetary policy and
2010
2.5
Chart
2.0I.2.2
Contributions
to Quarterly GDP Growth
2.0
1.5
1.0
(2013Q2,
Seasonally Adjusted, Percentage
Points)
1.5
of the previous Financial Stability Report in May 2014, whereas
improving. This improvement is attributed to the reasonable level
2009
Chart I.2.2
Chart
I.2.2
Contributions
to Quarterly GDP Growth
Source: CBRT, TURKSTAT
Contributions
to Quarterly
GDPPercentage
Growth
(2013Q2, Seasonally
Adjusted,
Points)
2.5
(2013Q2,
Seasonally Adjusted, Percentage Points)
were 9.6 percent and 11.6 percent, respectively, as of the release
The current account deficit is expected to keep
firs
firs
The
The
fac
firs
fac
ind
The
ind
fac
the
the
ind
po
po
the
po
po
po
23
Source: CBRT, TURKSTAT
21
1 2CBRT,
3 4 TURKSTAT
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
Source:
05.11
unemployment rates. Total and non-farm unemployment rates
25
05.11
05.11
May
09.11
09.11
June
01.12
01.12
The economic slowdown has led to an apparent surge in
29
23
25
Private
Private
Investment
Investment
Private
Investment
process.
25
31
29
23
Ara.12
Ara.12
Ara.12
12.12
and the weak external demand pose risks to the recovery
27
33
27
25
31
Şub.13
Şub.13
Şub.13
02.13
regarding global monetary policies, geopolitical developments
29
29
GDP
Final Domestic Demand
01.11
economic outlook in the second half of the year, uncertainties
29
27
33
27
09.10
the leading indicators point to a slight improvement in the
31
31
Domestic Demand
(Billion TL, 1998 prices)
29
01.11
01.11
May
was the main factor in this development (Chart I.2.2). Although
33
33
Chart I.2.1
31
GDP and Final
31
Private
Private
Private
Consumption
Consumption
Consumption
(Chart I.2.1). The weakness of domestic and external demand
33
33
Eki.12
Eki.12
Eki.12
10.12
in the first half of 2014, hovering below the historical averages
of Turkey
Final
GDP Domestic Demand
Final Domestic Demand
Ağu.12
Ağu.12
Ağu.12
08.12
The GDP posted a year-on-year increase of 3.3 percent
Chart I.2.1
Chartand
I.2.1Final Domestic Demand
GDP
GDP and
Final Domestic
Demand
(Billion
TL, 1998
prices)
Central
of GDP
the Republic
(Billion TL,Bank
1998 prices)
05.10
I.2. Domestic Developments
Central Bank of the Republic of Turkey
Central Bank of the Republic of Turkey
Haz.12
Haz.12
Haz.12
06.12
Türkiye Cumhuriyet Merkez Bankası
-5
(1) Portfolio includes equities and government domestic debt securities.
"Other"
is composed
the total
short and
long-term
net
loans
banks
(1) Calculated
byofweekly
netof
portfolio
flows.
Includes
data
onof
repo,
GDDS
and other sectors, bonds issued abroad by banks and the Treasury, and
and securities portfolio as well as banks' off-balance sheet FX position.
deposits at banks.
Source:
BRSA, CBRT
Source:
CBRT
(1) Portfolio includes equities and government domestic debt securities.
"Other"
is composed
the total
of government
short and long-term
net
loans
of banks
(1) Portfolio
includesofequities
and
domestic
debt
securities.
and
other
sectors, bonds
issued
banks
and the
"Other"
is composed
of the
total abroad
of short by
and
long-term
netTreasury,
loans of and
banks
deposits
atsectors,
banks. bonds issued abroad by banks and the Treasury, and
and other
Source:
depositsCBRT
at banks.
Source: CBRT
inc
qu
qu
in
Tur
Tur
Tur
in
the
in
Tur
thi
Tur
the
the
thi
thi
Tur
0
11
Financial Stability Report - November 2014
50
10
49
8
48
6
47
4
46
Central Bank of the Republic
of Turkey
45
Central Bank of the Republic of Turkey
2
Türkiye Cumhuriyet Merkez Bankası
08.14
06.14
04.14
02.14
12.13
10.13
08.13
06.13
04.13
02.13
12.12
10.12
08.12
06.12
04.12
Source: TURKSTAT
ChartI.2.5
I.2.5
Chart
1 1
CumulativePortfolio
Portfolio
Flows
Cumulative
Flows
(Billion
USD)
(Billion
USD)
Chart
I.2.5
Cumulative Portfolio
2011Flows1
2011
3030
(Billion USD)
2530
25
2013
2013
2012
2012
2011
2014
2014
2013
2012
2014
30 30
25 25
30
10 10
15
1015
10
5
Oct
Eki
Eki
Nov
Kas
Kas
Dec
Ara
Ara
Tem
Tem
July
Jan
Oca
Oca
Sept
Eyl
Eyl
-5
5
0
Aug
Ağu
Ağu
0
Haz
Haz
June
0
Feb
Şub
Şub
Mar
Mar
Mar
April
Nis
Nis
May
May
May
May
510
5
5
10
Ara
Kas
Eki
Eyl
Ağu
Tem
Haz
May
Nis
Mar
Şub
Oca
Chart I.2.6
EMBI-Turkey and Turkey's 5-Year CDS Prices
Chart I.2.6
EMBI
CDS
EMBI-Turkey and Turkey's 5-Year CDS Prices
450
EMBI
400
450
I.2.11
CDS
Chart
Composition of Central Government Debt Stock
350
400
and Average
Time to Maturity¹ (Month)
FX Denominated
Floating Rate
Fixed Rate
Average Maturity of Domestic Debt Stock (RA)
Average Maturity of External Debt Stock (RA)
300
350
250
300
200
250
rate for the Turkish lira also did not differ much from other
-5
economies
posting
current
account
deficits
(Chart
I.2.7).
emerging
economies
posting
current
account
deficits
(Chart
350
350
300
300
250
150
200
150
100
150
100
2014Sept.
2013
2012
2011
2010
2009
2008
2007
2006
Chart I.2.7
09.14 09.14
09.14
10.14 10.14
10.14
06.14 06.14
06.14
03.14 03.14
03.14
12.13 12.13
12.13
09.13 09.13
09.13
06.13 06.13
06.13
03.13 03.13
03.13
12.12 12.12
12.12
09.12 09.12
09.12
06.12 06.12
06.12
50
100
30
Current Account Deficit
Turkey
24
27
EM Countries Running
Current Account Deficit
Turkey
27
30
24
27
21
24
18
21
15
18
15
18
12
15
12
15
9
12
9
12
6
9
6
9
01.10
04.10
07.10
10.10
01.11
04.11
07.11
10.11
01.12
04.12
07.12
10.12
01.13
04.13
07.13
10.13
01.14
04.14
07.14
10.14
01.10
01.10
04.10
04.10
07.10
07.10
10.10
10.10
01.11
01.11
04.11
04.11
07.11
07.11
10.11
10.11
01.12
01.12
04.12
04.12
07.12
07.12
10.12
10.12
01.13
01.13
04.13
04.13
07.13
07.13
10.13
10.13
01.14
01.14
04.14
04.14
07.14
07.14
10.14
10.14
18
21
6
(1) Emerging economies posting current account deficits include Brazil, the
Czech Republic, Indonesia, South Africa, Colombia, Hungary, Mexico,
Poland, Romania, Chile and Turkey.
(1) Emerging
economies posting current account deficits include Brazil, the
Source:
Bloomberg
Czech Republic, Indonesia, South Africa, Colombia, Hungary, Mexico,
Poland, Romania, Chile and Turkey.
Source: Bloomberg
Chart I.2.8
Nominal Exchange Rate
Chart
I.2.8 2003=100)
(CPI-based,
Nominal Exchange Rate
3.5
(CPI-based, 2003=100) USD/TL
3.5
3.0
USD/TL
EUR/TL
Source: CBRT
07.14 07.14
07.14
02.14 02.14
02.14
09.13 09.13
09.13
03.13 03.13
03.13
10.12 10.12
10.12
05.12 05.12
05.12
12.11 12.11
12.11
06.11 06.11
06.11
01.11 01.11
01.11
08.10 08.10
08.10
1.5
1.0
03.10 03.10
03.10
1.5
1.0
10.09 10.09
10.09
2.0
1.5
04.09 04.09
04.09
2.0
1.5
11.08 11.08
11.08
2.5
2.0
06.08 06.08
06.08
2.5
2.0
01.08 01.08
01.08
3.0
2.5
Source: CBRT
12
3.5
3.0
2.5
1.0
economies posting current account deficits (Chart I.2.7).
The Turkish lira has been very stable since the release of t
The Turkish
lira haslira
been
stable
since
thesince
release
TheFinancial
Turkish
hasvery
been
very
stable
of t
previous
Stability
Report
(Chart
I.2.8).
Thethe
fallrelease
in the cost
of the previous Financial Stability Report (Chart I.2.8). The fall
previous
Financial Stability
(Chart
I.2.8).
The
fall influence
in the costt
euro-denominated
fundingReport
and the
weak
euro
may
Chart IV.2.1
euro-denominated
funding
and the
weak
euro may
influence
borrowing
preferences
of financial
and
corporate
sectors.
Therefot
in the cost of euro-denominated funding and the weak euro
The impacts
of macroprudential
policies on annual
may influence
the borrowing
preferences
of financial and
growth
and NPL ratio
borrowing
preferences
of financial
andpreferences
corporate sectors.
Therefo
likely credit
changes
in the funding
source
of financial
an
likely
changes
in
the
funding
source
preferences
of
financial
an
CC riskshould
weight measure
corporate sectors
be monitored. Real effective exchang
Total credit growh
corporate sectors. Therefore,
likely changes in the funding
Consumer loan growth
source preferences of financial
and corporate sectors should be
Housing LTV measure
corporate
sectors
should
be mainly
monitored.
Real
effective exchang
rates, Real
which
are
affected
nominal
CC-Provisions-Risk
weights
measures
2 byare
monitored.
effective
exchange
rates,
which
affectedexchange ra
CC-Provisions-Risk weights measures 1
NPL ratio (R.A)
rates,
which had
are
affected
mainly
by nominal
exchange ra
CC measures
movements,
been
a downtrend
since
mainly
by nominal exchange
rate on
movements,
had been
on a April 2013 b
100%
5%
80%
4%
60%
3%
40%
2%
since June 2014 (Chart I.2.9).
The fact that food prices in Turkey increased due to adverse
1%
The fact that food prices in Turkey
increased due to adver
0%
0% increased due to adver
The
fact
that
food
prices
in
Turkey
weather conditions despite the decline in global energy and fo
20%
weather conditions despite the decline in global energy and
food prices as well as the fact that the Turkish lira depreciated
weather
despite
decline
in global
energy
andhad
fo
as conditions
well
as
the on
fact
thatthe
the
Turkish
lira
have
CBRT.
have prices
had a Source:
negative
effect
inflation
(Chart
I.2.10).
Indepreciated
addition
prices
as well ason
the fact that
the Turkish
lira addition
depreciated have had
negative
(Chart
I.2.10).
to these
factors,effect
electricityinflation
and natural
gas
pricesIn
were raisedto these facto
negative effect
on inflation
(Chart
In addition
to these
facto
and7.93
natural
gasrespectively,
pricesI.2.10).
were
raised
by 9.3
an
percent
by 9.3electricity
percent and
percent,
further
pushing
electricity
and forecast
natural to
gas
raised
9.3 percent
an
7.93 percent,
respectively,
furtherwere
pushing
theby
year-end
inflati
the year-end
inflation
8.9 prices
percent.
Current
and
likely
percent,
respectively,
further
pushing
the
year-end
inflatia
future7.93
measures
are8.9
projected
to help
in achieving
a gradual
forecast
to
percent.
Current
and
likely
future
measures
Current
and fall
likely
future measures
fall in forecast
inflation into
2015.
projected
to 8.9
helppercent.
in achieving
a gradual
in inflation
in 2015. a
projected to help in achieving a gradual fall in inflation in 2015.
EUR/TL
3.5
3.0
I.2.7).
assumed
an
uptrend
inI.2.9).
January
2014
and
have
been more stab
2014 and
have
been
more
stable
since June
2014
(Chart
I.2.9).
since
June
2014
(Chart
27
30
6
the Turkish lira also did not differ much from other emergi
movements,
had
on a an
downtrend
since
April
2013
b
assumed
uptrend
inassumed
January
2014
and inhave
been
more
stab
downtrend
sincean
April
2013been
but
uptrend
January
0
Implied Volatility of Exchange Rates¹
(12-Month
Chart
I.2.7Ahead)
(1) Data of “Time to Maturity” pertains to October 2013.
Implied Volatility
of Exchange Rates¹
30
Source: Undersecretariat
of Treasury
(12-Month
Ahead)
EM Countries
Running
21
24
increased
due to theThe
fluctuating
trend of
in the
the exchange
risk premiums
emerging economies.
implied volatility
rate
emerging
The implied
volatility
the exchange
rate
the Turkisheconomies.
lira also did
not differ
muchof from
other emergi
-5
0
250
200
56.4
Source: Bloomberg
2005
0%
Source: Bloomberg
03.12 03.12
03.12
100
12.11 12.11
12.11
40%
09.11 09.11
09.11
60%
100
150
rates increased due to the fluctuating trend in the risk premiums
of emerging economies. The implied volatility of the exchange
115.2
06.11 06.11
06.11
150
200
01.11 01.11
01.11
03.11 03.11
03.11
80%
In the second half of 2014, implied volatility of exchange
0
5
(1) Calculated by weekly net portfolio flows. Includes data on repo, GDDS
(1) securities
Calculated
by weekly
net
flows. Includes
data
on repo, GDDS
and
portfolio
as well
asportfolio
banks' off-balance
sheet
FX position.
and securities
portfolio as well as banks' off-balance sheet FX position.
Source:
BRSA, CBRT
Source: BRSA, CBRT
(1) Calculated by weekly net portfolio flows. Includes data on repo, GDDS
and securities portfolio as well as banks' off-balance sheet FX position.
Source: BRSA, CBRT
20%
In the second half of 2014, implied volatility of exchange rat
In thedue
second
half fluctuating
of 2014, implied
exchange
rat
increased
to the
trendvolatility
in the ofrisk
premiums
15 15
20
1520
15
100%
encourage
economic growth (Chart I.2.6).
growth
(Chart I.2.6).
20 20
25
2025
20
0
economies. CDS premiums declined slightly due to the surge in t
economies.
CDS
premiums
declined
due tostatements
the surge in th
t
global
riskdue
appetite
triggered
by slightly
the
declined
slightly
to the surge
in the global
risk Fed's
appetite
global
riskFed’s
appetite
triggered
byI.2.6).
the economic
Fed's statements th
encourage
economic
growth
(Chart
triggered
by the
statements
that
encourage
01.06
06.06
11.06
04.07
09.07
02.08
07.08
12.08
05.09
10.09
03.10
08.10
01.11
06.11
11.11
04.12
09.12
02.13
07.13
12.13
05.14
02.12
0
1.0
Public debt stock indicators remained positive in the
Public debt stock indicators remained positive
debt has
stock
indicators
remained
positive
of 2014Public
and
there
been
nofluctuations
significant
the borrowing
structure
in spite
of the
inchange
financialin
of
2014 and
no significant
in
structure
in there
spite has
of been
the fluctuations
in change
financial
first half of 2014 and there has been no significant change in
in the first h
in
first h
thethe
borrowi
the
borrowiT
markets.
structure ininspite
of the
fluctuations
in debt
financial
the nominal
ratios
ofdebt
total
nettopublic
stockmarkets.
and the TE
stock downtrend
and the EU-defined
stock
GDP continues,
downtrend
in the
ratios
of total
net
public
debt
stock
and matur
the E
defined maturity
nominal
debt
stock
to
GDP
continues,
the
average
the average
of
domestic
and
external
debt
stocks
nominal
stock debt
to GDP
average and
matur
keepsdefined
and
the
composition
ofcontinues,
thekeeps
debt the
stock
ofexpanding
domestic
anddebt
external
stocks
expanding
t
markets. The downtrend in the ratios of total net public debt
of
domestic
and
debtremains
stocks keeps
expanding
and
t
remains
basically
the
same
(Chart
I.2.11).
composition
of
theexternal
debt stock
basically
the same
(Cha
composition
of the debt stock remains basically the same (Cha
I.2.11).
Financial Stability Report - November 2014
I.2.11).
Chart I.2.3
Unemployment and Labor Force Participation
Rates
(Seasonally adjusted, Percent)
Türkiye Cumhuriyet Merkez Bankası
Central Bank of Unemployment
the Republic
of Turkey
Rate
Central Bank of Non-farm
the Unemployment
Republic
of Turkey
Rate
Labor Force Participation Rate (RA)
I.2.12).
06.14
08.14
04.14
09.14
09.14
02.14
03.14
03.14
12.13
06.13
10.13
04.13
03.12
03.12
08.13
02.13
12.12
10.12
09.11
09.11
115
110
08.12
120
115
06.12
45
125
120
Source: TURKSTAT
Chart I.2.5
Cumulative Portfolio Flows1
(Billion USD)
2011
30
Source: CBRT
09.13
09.13
100
03.13
03.13
105
100
09.12
09.12
110
105
2013
2012
30
2014
Source: CBRT
25
25
Chart I.2.10
20
Chart
I.2.10
Price Indices
Price
Indices
(Annual
Percentage Change)
(Annual15Percentage
Change)
CPI
H Index
12
CPI
10
12
20
15
I Index
H Index
10
12
I Index
12
10
5
10
5
10
10
0
8
Nov
Oct
Sept
Aug
July
June
6
May
May
April
6
Mar
0
Feb
8
8
Jan
8
6
Dec
period until there is a significant improvement in inflation (Chart
46
0
03.11
03.11
to maintain the tight monetary policy stance in the upcoming
Depreciation Periods of TL
2
09.10
09.10
extent that the interest rate corridor allowed. It will continue
47
4
03.10
03.10
September and October by tightening its liquidity policy to the
48
130
125
04.12
flat. The CBRT quickly responded to the increased volatility in
49
135
130
09.09
09.09
monetary policy stance by keeping the yield curve almost
50
Depreciation
of TL
Real
EffectivePeriods
Exchange
Rate
02.12
uncertainties. Throughout this process, the Bank stuck to its tight
6
135
03.09
03.09
third quarters, following the easing of domestic and external
51
Real Effective Exchange Rate
09.08
09.08
CBRT introduced measured policy rate cuts in the second and
14
Chart12I.2.9
Chart
I.2.9
Real Effective
Exchange Rate
10
Real
Effective
Exchange Rate
(CPI-based,
2003=100)
8
(CPI-based,
2003=100)
01.08
01.08
Maintaining its cautious monetary policy stance, the
-5
6
(1) Calculated by weekly net portfolio flows. Includes data
4 on repo, GDDS
and securities portfolio as well as banks' off-balance sheet FX position.
4
Source: BRSA, CBRT
4
4
2
2
2
0
0
03.09
03.09
06.09
06.09
09.09
09.09
12.09
12.09
03.10
03.10
06.10
06.10
09.10
09.10
12.10
12.10
03.11
03.11
06.11
06.11
09.11
09.11
12.11
12.11
03.12
03.12
06.12
06.12
09.12
09.12
12.12
12.12
03.13
03.13
06.13
06.13
09.13
09.13
12.13
12.13
03.14
03.14
06.14
06.14
09.14
09.14
2
0
0
Source: TURKSTAT
Source: TURKSTAT
Chart I.2.11
Chart
Composition
Chart I.2.11
I.2.11 of Central Government Debt Stock
Composition
Central
Government
Debt
and
Averageof
Time
to Maturity¹
(Month)
Composition
of
Central
Government
Debt Stock
Stock
Denominated
and
Time
to
and Average
AverageFX
Time
to Maturity¹
Maturity¹ (Month)
(Month)
Floating
Rate
FX
FXDenominated
Denominated
Fixed
Rate
Floating
Rate
Floating
Rate
Average
Maturity of Domestic Debt Stock (RA)
Fixed
FixedRate
Rate
External
Average
Debt
Stock
(RA)
AverageMaturity
Maturityof
ofDomestic
DomesticDebt
DebtStock
Stock(RA)
(RA)
150
Average
AverageMaturity
Maturityof
ofExternal
ExternalDebt
DebtStock
Stock(RA)
(RA)
150
150
115.2
100%
100%
100%
80%
115.2
115.2
80%
80%
60%
60%
60%
40%
56.4
100
100
100
2013
2013
2013
2012
2012
2012
2011
2011
2011
2010
2010
2010
2009
2009
2009
2008
2008
2008
2007
2007
2007
0%
0%
2006
2006
2006
2005
2005
2005
20%
20%
0%
201420142014Eylül
Eylül
Sept.
56.4
56.4 50
50
50
40%
40%
20%
0
00
(1) Data of “Time to Maturity” pertains to October 2013.
Source: Undersecretariat of Treasury
(1)
(1)Data
Dataof
of“Time
“Timeto
toMaturity”
Maturity”pertains
pertainsto
toOctober
October2013.
2013.
Source:
Source:Undersecretariat
Undersecretariatof
of Treasury
Treasury
Chart I.2.12
Chart
GDDS I.2.12
Yield Curve
GDDS
Yield Curve
(Percent)
28.10.2013
(Percent)
12
31.01.2014
17.10.2014
31.01.2014
05.06.2014
28.10.2013
05.06.2014
12
11
17.10.2014
11
10
Yield
Yield
(Percent)
(Percent)
10
9
9
8
8
7
7
6
6
5
5
4
4
3
6
12
24
48
84
36
108 120
3
6
12
24
48 60 (Month)
72 84
Maturity
36
108 120
Source: Bloomberg
60
72
Maturity (Month)
Source: Bloomberg
Financial Stability Report - November 2014
13
int
int
qu
qu
Th
Th
sta
sta
re
re
tig
tig
co
co
po
po
im
im