Turkish Banking Sector Current Status and the Future Challenges

The strong recovery in the Turkish banking sector after the financial crisis that hit the country in 2001 sets a good example for countries experiencing similar difficulties. In this paper, we will first briefly discuss the financial and regulatory measures taken after the Turkish banking crisis. In addition, the current state of the Turkish banking sector will be discussed in a relatively detailed way. Particularly, some of the measures on bank capitalization and other reforms will be presented. Despite all these positive changes in the system, the Turkish financial sector has now reached a stage where further growth requires more structural macro reforms. We will conclude by summarizing the future risks and opportunities of the Turkish financial system.