Financial regulations for banking sector after 2001 crisis and assesment in terms of 2008 crisis

Regülation can be described as all manner of controls and regulatory measures taken by the government in order to implement efficiency in the economy and corrections of ineffectiveness which arising out of market failures. Financial markets fundamentally assume mediation between demand and supply of funds. Because of this important function attracting the attention of public, states want to take this sector under control. After deregulation and privatization by liberal understanding on economy, financial markets have faced with serious problems stemming from asymmetric information and market failures and these problems have led to crises. Financil system not under public control but subject to public regulation and supervision has been designed as mechanism against the market failures and crises arising from asymetry of information. In spite of feeling the impacts of 2008 global financial crisis, Turkish banking sector have been entered into crisis more preparedly and strongly than financial sector, especially banking sector, in devoloped and devoloping countries due to some structural differences. The reason of that, Turkish banking sector had experienced the reorganization process after the 2001 crisis. In this process; several structual changes; strengthen capital base of sector, generalizing awarenessand applications of risk management effectively, eliminating the problematicbanks from from the sector by various methods, have provided Turkish banking sector to not being affected negatively. Banking sector took lessons from the 2001 financial crisis and act prudently. Turkish banking sector did not have mortgage based assets. Therefore the sector was not affected from mortgage based losses.