Turkish banking system becomes to adapt new conditions and this
impacts to increase competition in terms of new services and
products. In particular, when foreign banks are coming to Turkish
market, domestic banks lag behind in respect to new modernization
of their diversify products and services. Banking system makes room
for different kinds of financial activities such as leasing,
factoring, and trading of gold. Under these circumstances, Turkish
bank has three major groups which are commercial banks, investment
and development banks and also interest free banks. In addition to
this, banking system can be classified into three categories which
are private-owned, state-owned and foreign banks. In Turkey, there
are different kinds of banks in terms of categories and also many
foreign bankers prefer to establish or bring their banking system.
Thanks to economic and financial reforms, these provide with
positive atmosphere for growth so as to encourage many foreign
bankers who enter to the sector through banking activities. Turkish
banking laws strengthen the banking sector and improve the
supervision standards in line with international standards such as
reporting, auditing and transparency.
Financial stability shapes the structure of banking system
Financial stability plays a crucial role on policy makers during
the last decade both in developed and emerging countries. As
financial crises have took place repeatedly throughout history in
both high and middle to low income countries. There is an important
correlation between financial market and financial stability. Since
the stability of financial system is significant in order to save
profitable investment opportunities. Therefore, financial system
has various factors which are social, legal, economic and political
factors affect the stability of financial system. All factors can
determine the value of system of society which in turn impacts the
functioning of the financial system. Legal factors can be described
as the laws and regulations which financial system involves in
taxation system, regulatory and international laws. Financial
system encompasses high degree of confidence which the key are
stable and participants can transact in them at prices. For the
purpose of financial stability is that it carries out its key
functions, including saving mobilization, resource allocation,
monitoring resource use, supporting the exchange of goods and
services and also facilitating risk management. Why financial
stability important is that the lack of financial stability can
generate huge problems in the economy such as financial fragility,
financial instability and financial crisis. Three items is very
significant for banking sectors. In regard to this, the conduct of
financial stability analysis assists the overall framework in
banking system for crisis prevention and management.
Turkish government focuses on the importance of financial
stability to have welfare life style in the society. Although many
countries face with economic crisis, this circumstance reflects
both conditions of life style for people and also economy for
banking system. As a result of this, Turkish government tries to
protect banking system from financial straits. In accordance with
the article 29 of Banking Law No. 5411, this law focuses on the
importance of obligations pertaining to internal system. The banks
shall establish and operate adequate and efficient internal
control, risk management and internal audit systems which are in
harmony with the scope and structure of their activities so as to
monitor and control the risk that they encounter. Taking everything
into account, economic stability poses for the sake of society and
regulations contributes to substantial financial stability.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under Regulation (EU) No. 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories ("EMIR")...
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