Reconstruction of the banking system during the low inflation period

Banking sector; as being one of the most important constituent of Turkish finance system has been rapidly developed since inception of the republic according to the political and economical conditions. This process came in to a new phase by the help of liberalisation and globalization after 1980. Limits of financial system had expended, competition had increased, services and activities of banking sytem had diversified by the help of knowledge and technology. However same process brought inflation runaway and instable growth of financial system on.In our country, similarly to other developing countries, diverse economical crisis and accordingly banking crisis occured. After diverse crisis, beginning from 2001 restructuring of banking sytem put into practice. Hereby, transition period of the low inflation system and synchronously harmonisation of banking system and economy to the new environment came up.The solution of crisis of banking and financial system depends on macroeconomical recovery, handling banking problems in a rapid and realistic way, simultaneously execution of programms regarding recapitalization and rearrangement of debts, extraction of banks from the system having deficient financial structureIn this context to prevent crisis or for getting out of the current crisis;it is needed to provide transparency at the market, to adopt proper accounting standards, to have large capacity of capital, to have efficient auditing and control at the banking sytem, for central bank to provide satisfactory amount of reserve and to prefer suitable macroeconomic policiesKey Words:1.Banking2.Crises3.Reconstruction4.Inflation5.Improvement