The role of financial regulation ensuring financial stability: An analysis for Turkey (1980-2017)

Financial stability, generally, is defined as the resilience of the economy against unforeseen circumstances which may disrupt the balance of the financial system. In the last 30 years, integration of financial markets globally and the technological developments have led to increase in complexity of these markets and the diversity of financial instruments. This has brought the question of how the regulators and supervisors of the financial system will adapt to the new order. On the other hand, in this period, the frequency of financial crisis experienced in both developed and developing countries has increased. These crises have not only deteriorated the financial systems of the countries they affect, but have also caused severe negativity on the volume of economic activity. The concept of regulation which means supervision and regulation, has gained importance in this context and the necessity of financial regulations has become a frequently discussed issue. in order to prevent the crises in Turkey (1994, November 2000, February 2001 and 2008 Global Financial Crisis) many financial regulation programs were applied and various regulations for regulatory institutions have been made. In this context, in this study, how the financial regulation play a role in ensuring financial stability in Turkey has tried to be analyzed in the light of crises experienced in the country.