Comparison of macroprudent policies: The example of the European Central Bank (ECB) and the Central Bank of The Republic of Türkiye (CBRT) in the covid-19 period (2020-2022)

The emergence of central banks can be seen as the result of humanity's quest to address economic challenges and increase prosperity. Throughout their historical development, central banks have held a significant position in establishing economic balance and supporting economic development. Until the 2008 global crisis, central banks primarily targeted price stability. However, the 2008 crisis demonstrated that achieving price stability alone was not sufficient; weaknesses in the financial system could negatively impact the economy. As a result, ensuring financial stability became a key objective for central banks. Today, central banks are tasked with both stabilizing prices and protecting the financial system and managing risks. This shift has arisen from the need to manage systemic risks in a globalizing economy and complex financial markets, making central banks a crucial element of economic stability. In the history of global pandemics, COVID-19 has gone down as one of the most devastating health crises of the modern era. The pandemic, which caused numerous deaths and strained healthcare systems worldwide, has also caused unprecedented economic impacts. Since 2020, the global and Turkish economies have been severely impacted by supply chain disruptions, fluctuating demand, rising unemployment, and restrictions. During this period, economic contractions have occurred, various sectors have felt the impact of the crisis to varying degrees, and governments have been forced to implement various policies to ensure economic recovery. This study compares the macroprudential policies implemented by the European Central Bank (ECB) and the Central Bank of the Republic of Turkey (CBRT) during the COVID-19 pandemic (2020-2022). The study examines the theoretical framework of macroprudential policies, the impact of the COVID-19 pandemic on the global and Turkish economies, and the macroprudential policies and tools implemented in conjunction with the monetary policies implemented by the ECB and CBRT during the pandemic. The research aims to assess the effectiveness of the macroprudential policies implemented during the COVID-19 period (2020- 2022) and offer important insights into the roles of the ECB and CBRT. Furthermore, this study provides a framework for understanding the differences in macroprudential policies between emerging and developed economies.