Analysis of the efficiency of the Turkish banking sector within the scope of regulations the banking sector: The example of deposit banks

The banking sector, unlike other sectors, is directly connected to all economies and is in constant interaction, so even the slightest negativity or performance decline in this sector has significant effects on the economic system. The critical importance of the banking sector causes it to be accepted as one of the main actors of the economy. The need to create an environment of trust in the banking sector, the intermediary role assumed by the sector, the sector reflecting the economy in general, the importance of establishing competition, the risk of market failures causing major losses and the need to prevent this, the sensitivity of the sector to crises and the continuous change and development of the structure of the sector lead to the need for regulation in the banking sector. The effect of the regulations on the efficiency level of banks operating in the sector is an important issue. Therefore, this study analyzes the effect of the regulations implemented in the Turkish banking sector on the efficiency levels of banks. For this purpose, the Malmquist Total Factor Productivity Change Index is used to analyze the effect of the regulations implemented in the banking sector on the efficiency of 18 deposit banks operating continuously in the relevant period during the 1998-2023 period. As a result of the analysis, it is concluded that all implemented regulations increase the total factor productivity values of banks thanks to the improvement reflected in the technological efficiency values, and that the current regulations are not sufficient to increase the managerial and scale efficiency levels.