The effects of the capital flows to banking sector in Turkey

ABSTRACT In this paper, the effects of the capital flows have been analyzed on banking sector in Turkey. Here with the "capital flows", we are not indicating the direct investments, on the contrary we express the short-term capital flows (hot money). In the literature, the effects of the hot money on developing countries are topics of discussion. Especially after 1989 in Turkey, with the releasing of the capital flows, the effect of these is a memorandum sheet. In this thesis study, first we have analyzed all of the banking sector balance sheets and risks and also we have worked on Şekerbank data's. After, using the 1996- 2002 Balance of Payments Statistics, we have set up a statistical model that mentions the dependent variable Hot Money affected by which variables. In conclusion, we may say that the Hot Money comes with the effects of endogenous variables and influence our banking sector which of the structure was not regulated properly. Key Words: Financial Liberalization, Short-Term Capital Flow, Hot Money, Banking Sector Balance Sheet and Risks. xui