The main characteristics of Turkish banking system and its response to Dissertation

The main characteristics of Turkish banking system and its response to recent global financial crisis - Dissertation Example 62 Conclusion 64 Chapter Five 66 Conclusion 66 Table 1 68 Bibliography 71 Can Turkey’s Banking System Act as a Model To Buffer Global Financial Crises? Introduction With the burst of the US property bubble in 2008, mortgage defaults increased astronomically with irreparable harm to global banking sectors and financial institutions worldwide. A number of banks were hard hit by either non-performing loans or complicated financial assets arising under bad loans. As a consequence, actors in the market emerged as cautious which were further exacerbated by doubts about primary financial institutions’ solvency. ... Turkey also does not have an operating mortgage sector like the US has. Turkey’s Central Bank’s macroeconomic policies and measures taking by Turkey’s banks in response to the global financial crisis also contributed to the limited impact of the 2008 global financial crisis of 2008.4 This dissertation conducts a critical analysis of the main characteristics of the Turkish banking system and its response to the recent global financial crisis of 2008-2009. The main purpose is to determine whether or not, Turkey’s banking system represents a model for buffering the effects of global financial crises. This research is justified by the fact that the Turkish banking system faired relatively well during the recent global financial crisis of 2008-2009.5 At the same time, Turkey’s real economy suffered serious damages, thus making Turkey an interesting case study. Thus this dissertation seeks to determine whether or not capital restructuring of financial ins titutions which creates a hard cap against loans and mortgages suppresses economic stimulation elsewhere. Profits during the global financial crisis of the Turkish banking system were impressive compared to that of other countries including developed economies.6 While banks all over the world were collapsing, Turkey’s banks remained stable and registered profits.7 The Turkish banking system’s ability to withstand the 2008-2009 global financial crisis is generally attributed to its regulatory framework and risk protocols.8 The Turkish banking system has learned a lot with respect to responding to economic shocks and risk management following the financial crises of 2000-2001.9 As a result the Turkish banking system devised