Outline

I. Financial Development and the Associated Policy Trade-Offs

II. Perspectives from the Turkish Experience

Financial development is a multi-dimensional concept.

 Different dimensions of financial development:

 Financial depth (credit deepening)

 Access to financial services

 Intermediation costs

 Stability of intermediation (non-performing loans)

 Policies that affect the pace of financial development are multi-dimensional as well:

 Fiscal performance (low public borrowing requirement)

 Monetary policy performance (low and stable inflation)

 Legal-structural reforms and banking regulations

 Financial and trade openness

 Financial literacy