IN 2012, THE LOSS OF
PACE IN GLOBAL ECONOMIC
ACTIVITY BECAME MORE
PRONOUNCED, AND
CONCERNS CENTERED ON
PUBLIC INDEBTEDNESS
AND THE BANKING
INDUSTRY CONTINUED
TO BE ON THE AGENDA,
PARTICULARLY IN THE
EURO ZONE COUNTRIES.
LOOSE MONETARY POLICY
IMPLEMENTATIONS AIMED AT
SUPPORTING THE ECONOMIC ACTIVITY.
While the data released in the U.S. on
the employment and housing sectors
pointed at a weaker economic recovery
than anticipated in 2012, the loss of pace
continued in emerging economies, especially
in China. In this framework, the central
banks of developed economies continued
with loose monetary policy implementations
aimed at supporting economic activity on a
larger scale. The central banks of emerging
countries also loosened their monetary
policies in the reporting period insofar as
required by the global economic situation.
It is generally agreed that in the coming
period, the monetary policies pursued by
the central banks of developed countries in
particular will have an effect on the course
of global economic activity, and in the light
of available data, unprecedented low levels
in interest rates will perpetuate in the
medium term.
A THIRD ROUND OF QUANTITATIVE
EASING WAS LAUNCHED IN THE US.
The United States Federal Reserve (“the
Fed”) launched a third round of quantitative
easing based on concerns that high
unemployment rates would lead to a
structural deterioration in the labor market.
Under this initiative, the Fed confirmed
that it will continue with mortgage-backed
securities purchases until improvement is
ensured in the labor market.
In a monetary policy meeting held in
December 2012, the Fed resolved to stick
with the low interest rate implementation
unless expected improvement is secured
in the unemployment rate, so long as
inflation forecasts remained under control.
Thus, the Fed signaled an extension of the
low interest implementation, previously
announced to remain in effect until the
end of 2014. Moreover, government
bond purchases were also included in the
program, in addition to the previously
introduced mortgage-backed securities
purchases.
STRONG SUPPORT FROM THE
EUROPEAN CENTRAL BANK
Due to the deterioration observed in the
financial markets in conjunction with high
interest on borrowing in the distressed Euro
Zone economies, the European Central Bank
(ECB) also introduced a program that allows
unlimited buying of distressed government
bonds in the secondary market. On another
front, concerns arose over the of these
effectiveness of these decisions passed
because of the specific conditions imposed
on bond purchases in the intended program.
SLOWDOWN IN THE GROWTH
PERFORMANCES OF EMERGING
COUNTRIES
Led by China, emerging economies that
had registered rapid growth in the post-
global crisis recovery period displayed a
weak performance in 2012 compared with
previous years. However, leading indicators
published in the past year point at a gradual
recovery in those economies in the year
ahead.
THE WORLD ECONOMY
20
İŞBANK
ANNUAL REPORT 2012
1...,12,13,14,15,16,17,18,19,20,21 23,24,25,26,27,28,29,30,31,32,...300