Klaas Knot: The mission of Gerard Vissering - why we need independent central banks

Good morning everyone. It is a great honour to speak to you here today at Koç University, one of the top universities in Türkiye, and one with an outstanding international reputation. And I am delighted to be here in your country to celebrate the longstanding relationship between the Turkish central bank and the Dutch central bank. A relationship that is practically as old as the Turkish republic itself. A relationship that started with a secret mission by a Dutchman, on the invitation of the Turkish government. You will understand that I cannot stand here today and talk about our two central banks without referring to this wonderful story.

It is 1928. The new Turkish republic is experiencing financial difficulties. The country is struggling to obtain much-needed loans on the international capital market. Türkiye does not have a well-developed domestic banking system and still depends on the old Ottoman Bank. But the Ottoman Bank is almost entirely in the hands of the UK and France: countries with which Türkiye had been at war. So the government of President Atatürk is looking for independent advice. They approach the governor of the Dutch central bank, Mr Gerard Vissering, to investigate how the Turkish Pound can be stabilised and how a solid state bank can be established. Vissering is chosen because of his outstanding international reputation as an economist. He has been advising China on currency reform in 1912. It also helps that he is from a country that was neutral in the First World War and that has had strong commercial and political ties with Türkiye over several centuries. Vissering takes up residence in the building of the Iş Bank and gets to work. Here he also meets with Kemal Atatürk. There is a picture of the Turkish president leaving the building after his meeting with Vissering.