"The EU and Turkey are united on the issue of capital markets standards"

11 December 2007, Ankara

Speech outline of Mr. Marc Pierini,

Head of the Delegation of the European Commission to Turkey

§      Mr. Deputy Prime Minister, Mr. Chairman of the Capital Markets Board of Turkey, Representative of the Federal Financial Supervisory Authority of Germany, Mr. Ambassador, dear guests,

 

§      You may have noticed in today’s news and in the MFA statement about the conclusions of yesterday’s EU Council of Ministers that there is some discontent in turkey about the EU Accession process. Yet, we have gathered here to close an important project on the road to Turkey’s accession to the EU. I would like to make four points in this respect.

 

§      At a general policy level, the EU and Turkey are united on the issue of capital markets standards.

 

§      In the EU, we consider that financial markets are crucial to the functioning of modern economies. More integration in financial markets leads to better allocation of capital. This is a key component of sustainable economic growth. Completing the single market in financial services is part and parcel of the Union’s overall objective of creating more and better jobs in a more dynamic, innovative and attractive Europe.

 

§      For its part, Turkey initiated a comprehensive reform agenda for its financial sector after the crisis in 2001,which was first of all a financial one. Banking was the main pillar of the reform agenda, followed by insurance and capital markets.

 

§      Several important laws have been adopted as part of this process. For instance, the Banking Law, the Law on Bank and Credit Cards, and the Insurance Law. Turkey has significantly improved its level of harmonisation with the EU legislative framework. We hope that further progress will be achieved in the coming months, by the adoption of the new Capital Markets Law drafted during our project.

 

§      The Commission warmly welcomes all these developments. We are also happy to see that Turkish authorities regard progress in financial services as a necessary and crucial component of economic development.

 

 

§      Financial services is an important and challenging chapter in the accession process. Progress in financial services will contribute to this goal. It will do so in two respects:   

 

 

 

§      As for future work, we expect further progress in the Turkish financial services legislation. The Commission recently communicated a new Accession Partnership proposal to the European Council on short and medium-term priorities for Turkey. Accordingly:

 

- Further alignment is needed to adopt the new EU capital requirements framework. This issue and other related directives cover both banks and investment firms. We believe that this area requires intensive co-operation between the regulatory authorities in Turkey, which are in charge of different segments of the financial services.

 

- We expect regulatory authorities to further strengthen their prudential and supervisory standards, while establishing an independent regulatory and supervisory authority in insurance.

 

§      Concerning the twinning project in particular, we have sought to contribute to the further development of the Turkish financial services sector by providing financial assistance of € 2.5 million to the Capital Markets Board of Turkey.  Under the twinning component of this programme, which has a budget of 2 million euros, Turkish experts and German experts from BaFin achieved a high level of co-operation. They jointly prepared a new draft law for the Turkish capital markets and the related implementing regulations. They organised training activities, study visits, and improved their networking capacities, which is key to supervisory cooperation between countries.

 

§      Although this project has come to an end, we will continue to collaborate with the Capital Markets Board of Turkey in the coming years. Moreover, we are willing to provide additional assistance to the regulatory authorities for their alignment activities with the European Union.

 

§      The twinning technique which we use extensively in Turkey has proven to be a very effective method for transferring the acquis to Turkey, based on practical cooperation of institutions and experts having the same field of specialisation. Projects such as the one we are closing today may not say much to the men and women in the street, but all those present here today know their fundamental relevance to the accession process.

 

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§      I would like to thank, Deputy Prime Minister Nazım Ekren, the Capital Markets Board of Turkey, the German Federal Financial Supervisory Authority and the Federal Ministry of Finance, and all the relevant parties for all their efforts which made this project a significant success.

 

§      In concluding, let me say that I am confident that this project will contribute to the integration of the Turkish financial markets with those of the European Union, and further improve the stability and soundness of the Turkish financial system.

 

 

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