Risk management in banking and the possible effects of the COVID-19 pandemic on the Turkish banking sector

The covid-19 virus, which was first seen in Wuhan, China, spread all over the world in a short time, disrupting all sectors, especially the health sector. One of the important sectors affected by the epidemic is the financial sector. The central banks of the countries around the world generally provided liquidity support to the markets by printing money, structured the existing loans, tried to protect the households and the real sector against the negative economic effects of the epidemic with low interest loans and social assistance. Similarly, in Turkey, practices such as extending loan follow-up maturities and providing low-interest loans to the real sector and households through deposit banks have been implemented through banks that are the locomotive of financial markets. Extraordinary measures were taken by the BRSA in order to reduce the negative effects of the covid-19 epidemic on the markets and the Turkish economy, and TL-FX swap transactions were limited to a certain percentage of the bank's equity in order to prevent financial institutions operating abroad from borrowing TL and creating foreign exchange demand. In order to increase the loan volume, the calculation coefficients of the asset ratio were changed. The aim of this study is to examine the effects of the Covid-19 pandemic and the regulations implemented in this context on the financial statements through the main risks in banking. In the first parts of the study, risk management, capital regulations and the types of risks that the sector is exposed to were examined, and in the last part, the effects of the Turkish banking sector were analyzed with the help of tables and graphs by comparing the current regulations applied during the period of the virus and the sector ratios obtained during the pre-pandemic period and the pandemic period.