Basel III: Its effects on risk of consumer loans in Turkish banking sector

Crisis period arisen as a result of collapse of economical systems executed commonly since 1980s in the world is assumed by some communities as onset of the globalization. Such experienced problems reveal that supervision mechanism of the financial and banking systems should be effective. In this scope, the capital adequacy conditions in banking developed first by the Basel Committee on Banking Supervision acting in the body of the European Payment Bank in 1988 and called as ?Basel I criteria? were revised by Basel II in 2004 and it is ensured that it constitutes not only capital adequacy guidelines, but also guidelines of an integral risk management. With effect of any deficiencies appearing in any changing conditions and existing arrangements, it is agreed upon third generation regulatory guidelines in later 2010. Basel III application framework aims to minimize any problems experienced in banking and financial sectors in 2008 financial crisis through any measures to be taken as well as any renovations in capital adequacy condition.In this study, any effects of the Basell III criteria that include a new application and are intended to enter into force gradually until 2019 upon risk and development of consumer loans in Turkish banking sector are investigated.Key Words: Basel I, Basel II, Basel III, Consumer Loan, Risk Management.