As an alternative monetary authority: Currency board, world samples and its practicability in Turkey

The first condition of providing economic stability is to gain the price stability and to sustain it. Currently, this task is performed by the central banks of states. The most important feature which is necessary to have by the central banks to perform this task and to provide a reliable and predictable atmosphere to all parts of the economy is a legal and de facto statute which means keeping away from the pressure of political power and containing a series of institutional, legal and instrumental guarentees which can be defined as ?the central bank independence?. In countries which experienced serious problems in economic life and couldn't keep the price stability, a search for an alternative money authority having more rigid practices and a high credibility has come out as a key for going out the economic crisis and the practice of the Currency Board has took place in a wide area in response to this need. The Currency Board system which won enormous successes in the countries put into practice has been pronounced as an alternative institution in each countries which experienced a financial crisis. In this study, the independence of central bank, it's task for providing the price stability, the historical development of the Currency Board being concerned as an alternative institution to the central banks and The Currency Board's stracture in the light of the practices in the world and the conditions of being successful has been examined. Especially by examining the recent samples, it has been studied to answer the question of whether it is a suitable alternative or not in Turkey in terms of practice area in the past and at present. The conclusion derived from the study, the Currency Board system can only gain the success being desired when the circumstances are backed up by structual reforms. But because of the rigid arrangements contained, under the fact of free movement of capital which is especially the most important characteristic of global economy, this system is highly susceptible and open to the external shocks and the successes which are gained after the fights lasting for years can be lost in a minute because of the structural weaknesses inside the system.